On Tuesday (September 10), local time, OPEC released its latest monthly report. It lowered its forecasts for global oil demand growth for this year and next. This is the second consecutive downward revision.
OPEC expects 2.03 million barrels per day growth in global oil demand this year and 1.74 million barrels per day next year. Last month’s forecasts were 2.11 million barrels per day and 1.78 million barrels per day. Total demand in 2024 will be 104.2 million barrels per day, and in 2025 it will be 106 million barrels per day.
The report says global oil demand growth is still healthy, much higher than the pre-pandemic average of 1.4 million barrels per day. This is due to strong air travel, road mobility, and healthy industrial, construction, and agricultural activities in non-OECD countries.
In the report, OPEC raised its global economic growth forecast for this year to 3% from 2.9% but kept next year’s forecast at 2.9%.
OPEC’s total crude oil production in August fell by 197,000 barrels per day to 26.59 million barrels per day due to supply disruptions in Libya.
As international oil prices plunged last week amid growing concerns about global demand, erasing all gains so far this year, this report was released.
Brent crude oil futures fell below $69 per barrel on Tuesday, with an intraday decline of nearly 4%, hitting a new low since December 2021.
The slump in oil prices has forced OPEC+ to postpone its production resumption plan. OPEC+ is implementing a production cut of about 2.2 million barrels per day. The alliance was supposed to ease voluntary cuts from October but postponed it to December.
OPEC+ is an alliance of OPEC and countries led by Russia.
Market observers say oil prices are far below what Saudi Arabia and Russia need to balance their budgets.
Saudi Arabia and Russia have reasons to support oil prices. Saudi Arabia’s “Vision 2030” needs funds, and Russia needs oil income for military expenditure.
Reproduction Notes：InvestFancy » OPEC Lowers Global Oil Demand Growth Forecasts for 2024 and 2025