OPEC cuts oil demand forecast for 2024 due to weak intake from China

New Delhi [India], August 12 (ANI): The Organization of the Petroleum Exporting Countries (OPEC) has slightly revised down global crude oil demand forecast for 2024, citing softer intake by China.

The world oil demand growth forecast for 2024 is revised down slightly by 135,000 barrels per day from the previous month’s assessment. It now stands at a healthy 2.1 million barrels per day, well above the historical average of 1.4 million barrels per day seen prior to the COVID-19 pandemic.

Today’s slight revision, OPEC said, reflects actual data received for first quarter of 2024 and in some cases from second quarter of 2024, as well as softening expectations for China’s oil demand growth in 2024.

Within the main regions, oil demand from OECD countries is expected to grow by around 0.2 million barrels per day in 2024, while non-OECD oil demand is expected to increase by around 1.9 million barrels per day.

In 2025, world oil demand is also revised slightly down by 65 tb/d, reaching about 1.8 mb/d. OECD demand is expected to expand by about 0.1 mb/d in 2025, with OECD Americas contributing the largest increase.

Non-OECD demand is set to drive next year’s growth, increasing by about 1.7 mb/d, led by contributions from China, the Middle East, Other Asia, and India.

Between January and April, oil futures prices rallied, with ICE Brent and NYMEX WTI front-month contracts rising by USD 9.85 and USD 10.53, or 12.4 per cent and 14.3 per cent, respectively.

“In addition to robust physical crude market fundamentals, oil futures prices were further supported by easing speculative selling, higher risk premiums and several unplanned supply outages,” the OPEC report read.

Additionally, resilient global economic growth and positive economic indicators from the US and India supported market sentiment. However, uncertainties related to China’s economic outlook and the US Fed’s monetary policy, along with a strengthening US dollar, limited the upward momentum, the oil producers’ group said.

Between May and July, oil prices declined, primarily due to sentiment driven by speculative selloffs, easing geopolitical risk premiums and mixed economic indicators.

Market sentiment was further affected by uncertainty surrounding central bank monetary policies, particularly prospects for prolonged high interest rates in the US as a means of addressing ongoing inflation.

Additionally, concerns about China’s economic performance and demand growth, coupled with a slower-than-expected onset of the driving season, contributed to the downward pressure on prices, OPEC said.