OPEC on Monday cut its forecast for global oil demand growth in 2024, citing weaker than expected data for the first half of the year and softer expectations for China, and also trimmed its expectation for next year.
The Organization of the Petroleum Exporting Countries in a monthly report said world oil demand will rise by 2.11 million barrels a day in 2024, down from growth of 2.25 million b/d expected last month.
“This slight revision reflects actual data received for the first quarter of 2024 and in some cases for the second quarter, as well as softening expectations for China’s oil demand growth in 2024,” OPEC said in the report.
“Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility.”
This is the first reduction in OPEC’s 2024 forecast since it was first made in July, 2023. There is a wider than usual split between forecasters on the strength of oil demand growth in 2024 due to differences over China and more broadly over the pace of the world’s transition to cleaner fuels.
The reduction still leaves OPEC at the top end of industry estimates. Oil was steady after the report was released, trading above US$80 a barrel.
In the report, OPEC also cut next year’s demand growth estimate to 1.78 million b/d from 1.85 million b/d previously expected.
OPEC+, which groups OPEC and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million b/d until the end of September and gradually phase it out from October.
The International Energy Agency, which represents industrialized countries, sees much lower demand growth than OPEC of 970,000 b/d in 2024. The IEA also updates its figures this week.