OPEC cut its forecast for global oil demand growth this year and next on Tuesday, highlighting weakness in China, India and other regions, marking the producer group’s fourth consecutive downward revision in the 2024 outlook.
The weaker outlook highlights the challenge facing OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, which earlier this month postponed a plan to start raising output in December against a backdrop of falling prices.
In a monthly report on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million bpd forecast last month. Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.
In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million bpd from 1.64 million bpd.
China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 bpd from 580,000 bpd and said diesel use in September fell year-on-year for a seventh consecutive month.
“Diesel has been under pressure from a slowdown in construction amid weak manufacturing activity, combined with the ongoing deployment of LNG-fuelled trucks,” OPEC said with reference to China.
Oil pared gains after the report was issued, with Brent crude trading below $73 a barrel.
Forecasts on the strength of demand growth in 2024 vary widely, partly due to differences over demand from China and the pace of the world’s switch to cleaner fuels.
OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency’s far lower view.
The IEA, which represents industrialised countries, sees demand growth of 860,000 bpd in 2024. The agency is scheduled to update its figures on Thursday.
OUTPUT RISES
OPEC+ has implemented a series of output cuts since late 2022 to support prices, most of which are in place until the end of 2025.
The group was to start unwinding the most recent layer of cuts of 2.2 million bpd from December but said on Nov. 3 it will delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.
OPEC’s output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million bpd in October, up 215,000 bpd from September. Iraq cut output to 4.07 million bpd, closer to its 4 million bpd quota.
As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas.
Russia’s output edged up in October by 9,000 bpd to about 9.01 million bpd, OPEC said, slightly above its quota.
