OPEC

OPEC again cuts its forecasts for world oil demand

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The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for world oil demand growth in 2024 and also trimmed its expectation for 2025 marking the cartel’s second consecutive downward revision, mainly due to lower than previously expected oil demand growth from China, the world’s largest oil importer, and the US.

OPEC in its latest Monthly Oil Market Report (MOMR) said global oil demand will rise by 2.03 million barrels per day (bpd) this year, down from growth of 2.11 million bpd expected in August. Until last month, the Vienna-based organisation had kept the forecast unchanged since it was first made in July 2023.

China accounted for the bulk of the latest downgrade. OPEC now sees China’s oil demand growing by 650,000 b/d this year, compared with 700,000 b/d in the previous report. It cut US oil demand growth by 60,000 b/d to 110,000 b/d. China’s crude oil imports averaged 3.1% lower this year from January through August compared to the same period last year, customs data showed.

“Looking ahead, China’s economic growth is expected to remain well supported,” OPEC said in the report.
“However, headwinds in the real estate sector and the increasing penetration of LNG trucks and electric vehicles are likely to weigh on diesel and gasoline demand going forward.”

The report came a day after Dated Brent hit a 17-month low of $72.13/b, according to assessments by Platts, part of S&P Global Commodity Insights, and five days after OPEC+, which comprises the OPEC and allies such as Russia, delayed a plan to start pumping more oil after prices hit the lowest in 2024.

Oil prices have declined sharply in early September following weaker-than-expected economic data from the US and China.