The Organization of Petroleum Exporting Countries (OPEC) has once again reduced its global oil demand growth forecasts for the coming years. In its latest monthly report, the group has lowered the oil demand growth forecast for 2024 to 1.61 million barrels per day (b/d) from the previous forecast of 1.82 million b/d. Additionally, the forecast for 2025 has been adjusted to 1.45 million b/d from an earlier projection of 1.54 million b/d.
This marks the fifth consecutive month that OPEC has trimmed its oil demand growth estimates, with the latest reduction being the most significant for the year 2024. The downward revisions are a response to what the group describes as "bearish data" received for the third quarter, particularly from regions such as the OECD Americas and OECD Asia Pacific.
The recent decision by the OPEC+ alliance, which includes Russia and is led by Saudi Arabia, to postpone the restart of halted crude production has also influenced the demand outlook. The group has decided to delay the first of a scheduled series of production increases to April, which was initially planned for January of next year.
These revisions come amid a period of declining oil prices, with Brent futures trading near $73 a barrel, a drop of 17% since early July. The decrease in prices is attributed to a faltering demand in China and a surge in supply from OPEC's competitors in the Americas.
While OPEC has made these adjustments, its forecasts remain higher than most other predictions in the oil industry. For instance, OPEC's growth projections for 2024 are roughly double those of financial institutions such as Morgan Stanley (NYSE:MS) and Goldman Sachs Group Inc (NYSE:GS). They also exceed estimates from the International Energy Agency and Saudi Arabia's state oil company, Aramco (TADAWUL:2222).
OPEC anticipates that oil consumption will average 103.82 million barrels a day this year. The organization has been implementing output restrictions since 2022 to prevent a surplus and support prices. Following last week's decision, OPEC+ aims to gradually reintroduce 2.2 million barrels a day of halted production in small increments extending from April to late 2026.
The repeated revisions and the current state of oil demand cast doubt on OPEC's long-term view that oil consumption will continue to grow until the mid-century, a perspective that is not widely shared within the petroleum industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.