OPEC Reduces 2024 Oil Demand Growth Forecast

The Organization of the Petroleum Exporting Countries (OPEC) has revised its global oil demand forecast downward for 2024, marking the fourth consecutive adjustment. The latest update now projects global oil consumption to increase by 1.82 million barrels per day (bpd), a reduction from the previously anticipated 1.93 million bpd. This cut reflects ongoing uncertainties in global energy markets, influenced by factors such as slower economic recovery in key regions and reduced demand from China, which is a major oil consumer.

OPEC’s decision to revise its forecast highlights a growing divergence between the group’s expectations and those of other forecasters. Industry experts have varying views on the future trajectory of global demand, particularly regarding the pace of the transition to cleaner energy sources. OPEC’s updated estimate remains at the upper end of most predictions, though it is significantly lower than initial forecasts earlier in the year.

In addition to reducing its 2024 outlook, OPEC has also lowered its 2025 oil demand growth forecast to 1.54 million bpd, down from 1.64 million bpd. This reduction further underscores the challenges facing the oil market, with demand not rebounding as strongly as anticipated in earlier months. The group has attributed the decline to a mix of factors, including geopolitical tensions, the ongoing shift towards renewable energy, and the high costs of oil, which have led to weaker-than-expected consumption in some markets.

This forecast reduction comes at a time when OPEC’s own production decisions are under intense scrutiny. The oil cartel has faced calls from consumers, especially large economies, to increase output in response to rising prices and supply concerns. However, OPEC’s leadership has repeatedly emphasized the need for stability in the market, prioritizing long-term supply over short-term demand fluctuations.