By Charles Ebi
Organization of Petroleum Exporting Countries has lowered its 2024 global oil demand growth forecast for the fifth consecutive month, cutting the estimate by 210,000 barrels per day ,bpd,, to 1.61m bpd, according to its monthly report released on Wednesday.
This marks the largest reduction in its projections since August and highlights the faltering role of China as the primary driver of global oil demand growth.
The downgrade underscores significant challenges for OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia.
Earlier this month, OPEC+ delayed plans to increase output until April 2025, citing weak demand and persistently low oil prices. Brent crude oil prices dipped below $73 per barrel following the report’s release.
OPEC’s latest adjustment reflects bearish data from the third quarter of 2023. The group also revised its 2025 demand growth forecast, lowering it to 1.45m bpd from 1.54m bpd.
These cuts bring OPEC’s projections closer to the International Energy Agency ,IEA, which anticipates a far lower 920,000 bpd demand growth in 2024. The IEA is set to update its forecast on Thursday.
China, once the dominant force in driving global oil demand, was a major factor in OPEC’s latest reduction. The organization now predicts Chinese demand to grow by 430,000 bpd in 2024, down sharply from the 760,000 bpd forecast in July.
With China’s crude oil imports potentially peaking as early as next year due to declining transport fuel consumption, the world’s top crude buyer appears to be losing momentum.
Other regions, including India, the Middle East, and parts of Africa, also contributed to the downward revision. This trend highlights broader uncertainties in global energy markets, fueled by varying assessments of Chinese demand and the world’s transition to cleaner energy sources.
Since late 2022, OPEC+ has implemented a series of production cuts aimed at stabilizing prices. The group had planned to ease these reductions starting in January 2024 but announced on December 5 that it would extend the cuts until April 2025. Rising non-OPEC supply and weak global demand have continued to exert downward pressure on the oil market.
While OPEC’s outlook remains among the more optimistic in the industry, its series of downgrades reflects a growing alignment with less robust forecasts.
The evolving landscape of global energy demand presents an ongoing challenge for oil producers as they navigate an increasingly complex and uncertain market.
