On Wednesday, OPEC stated that resilient economic growth and air travel would support fuel use during the summer months, maintaining its forecast for relatively strong growth in global oil demand in 2024 and the year after that.
According to a monthly report from the Organization of the Petroleum Exporting Countries, global oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025. From last month, neither of the forecasts had changed.
According to OPEC’s statement in the report, “Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is expected to bolster demand for transportation fuels and drive growth in the United States.”
Differences in how quickly the world is moving toward cleaner fuels are one reason why oil forecasters are more divided than usual regarding the strength of oil demand growth for this year and the medium term.
Earlier on Wednesday, BP stated that the peak of oil demand would occur next year. Since the end of 2022, the market has been supported by OPEC+, which includes OPEC and allies like Russia.
On June 2, the group agreed to gradually phase out the most recent cut of 2.2 million bpd starting in October and remaining in place until the end of September. OPEC also said that the world economy will grow by 2.9% this year, up from 2.8% last year.
It said that the number could go up because of momentum outside of developed countries in the Organization for Economic Cooperation and Development. After four weeks of gains, oil prices fell on Monday as optimism over a ceasefire agreement in Gaza eased concerns about a tightening supply.
“In the first half, economic growth momentum in major economies remained resilient. “OPEC stated that this trend supports an overall positive growth trajectory in the near future.” Oil was consistent after the OPEC report was delivered, with Brent rough exchanging underneath $85 a barrel.
In its annual Energy Outlook, which was released on Wednesday, BP anticipates that demand will reach its peak next year in both of the two main scenarios. However, OPEC’s forecasts are at the upper end of what the industry anticipates.
The International Energy Agency, which represents industrialized nations, is scheduled to provide an update on its viewpoint on Thursday. It anticipates a demand growth rate of 960,000 bpd in 2024 that is significantly lower than that of OPEC. OPEC’s report focuses to an oil supply deficiency before very long and in 2025 – a bigger shortage than the setback anticipated on Tuesday by U.S. government forecaster the Energy Data Organization.
In addition, the OPEC report predicts that demand for OPEC+ crude—that is, crude produced by OPEC and the allied countries that collaborate with it—will reach 43.6 million barrels per day in the third quarter, which is significantly more than the group is currently pumping.
