OPEC reaffirmed its forecast for robust growth in global oil demand for 2024 and 2025 while revising its economic growth projections for both periods, citing further potential for growth.
Stable Oil Demand Growth Projections:
In its monthly report, OPEC stated that global oil demand is expected to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, maintaining the same projections as the previous month.
OPEC highlighted a positive trajectory in economic growth, prompting an upward revision of its economic growth forecasts for 2024 and 2025 by 0.1 percentage points. The organization emphasized the potential for additional economic growth across major economies.
Price Support and Market Fundamentals:
Oil prices have been buoyed by conflict in the Middle East and supply disruptions in 2024, despite concerns about high-interest rates. Brent crude was trading around $82 a barrel on Tuesday, supported by factors such as supply disruptions and signs of robust market fundamentals.
According to OPEC, the rise in oil prices last month can be attributed to various factors, including reduced speculative selling pressure, supply disruptions, stronger-than-expected macroeconomic data, and favorable market fundamentals.
Divergence in Demand Forecasts:
OPEC’s forecast for oil demand growth in 2024 exceeds that of the International Energy Agency (IEA).
While OPEC expects a stronger demand expansion, the IEA is set to release its updated forecasts later in the week, potentially indicating a differing perspective on global oil demand trends.
Long-Term Outlook and Production Measures:
OPEC Secretary General Haitham Al Ghais reiterated the organization’s stance on long-term demand, emphasizing confidence in a robust outlook.
OPEC, alongside the wider OPEC+ alliance, has implemented output cuts since late 2022 to stabilize the market, with a new cut taking effect last month, resulting in a decline in OPEC oil production in January.