MUMBAI, 11 Jun (Commoditiescontrol): The Organization of the Petroleum Exporting Countries (OPEC) has reaffirmed its forecast for robust global oil demand growth in 2024, despite lower-than-expected usage in the first quarter. In its monthly report released on Tuesday, OPEC projected a rise in world oil demand by 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025, consistent with its previous month's forecast.
The report anticipates that travel and tourism will bolster consumption in the second half of 2024. This positive outlook for the oil market comes as oil prices surged by 3% on Monday following Goldman Sachs' prediction that transport demand would lead to a third-quarter deficit.
OPEC noted that steady global economic growth has continued in the first half of 2024 and expects world oil demand to increase by 2.3 million bpd in the second half. The OPEC+ alliance, which includes OPEC and its allies like Russia, has enacted several output cuts since late 2022 to support the market. On June 2, the group agreed to extend the latest cut of 2.2 million bpd until the end of September, with plans to gradually phase it out starting in October.
Following the release of the report, oil prices remained steady, with Brent crude slightly declining towards $81 per barrel. The market faces varied predictions regarding oil demand growth in 2024, partly due to differing views on the pace of the global transition to cleaner fuels. OPEC remains optimistic, holding the high end of demand growth forecasts.
The report indicated that while OPEC lowered its first-quarter demand estimate by 50,000 bpd to 103.51 million bpd, it increased the second-quarter forecast by the same amount, keeping the full-year estimate unchanged. In contrast, the International Energy Agency (IEA), representing industrialized countries, forecasts a significantly lower demand growth of 1.1 million bpd and is set to update its outlook on Wednesday.
OPEC projects demand for OPEC+ crude at 43.6 million bpd in the third quarter, significantly higher than the current production levels. In May, the OPEC+ group produced 40.92 million bpd, a decrease of 123,000 bpd from April, with production declines in Russia and Kazakhstan offset by increases in Nigeria and smaller African producers.
Meanwhile, analysts highlight a divergence in perspectives between OPEC and the IEA, reflecting varying views on economic conditions and the pace of the global energy transition. While OPEC remains optimistic, citing resilient non-OECD demand, the IEA's cautious outlook is influenced by economic headwinds and shifting consumption patterns in developed nations.
(By Commoditiescontrol Bureau; +91 98201 3018)
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