OPEC Forecasts Strong Global Oil Demand and Economic Growth
OPEC Sticks to Oil Demand View
OPEC reaffirmed its forecast for robust global oil demand growth in 2024 and 2025, with a positive outlook for economic growth in both years. The organization also raised its economic growth projections, citing potential for further expansion.
Oil Demand and Economic Growth Forecasts
The monthly report from the Organization of the Petroleum Exporting Countries (OPEC) predicts a 2.25 million barrels per day (bpd) increase in world oil demand for 2024 and a 1.85 million bpd rise in 2025. These figures remain unchanged from the previous month’s report.
OPEC anticipates that a favorable trend in economic growth will continue into the first half of 2024. As a result, the organization has raised its economic growth forecasts for both 2024 and 2025 by 0.1 percentage points.
Impact on Oil Prices
Oil prices have been influenced by conflicts in the Middle East and supply disruptions, despite concerns about high interest rates. As of now, oil is trading around $82 a barrel, reflecting a 0.5% increase.
Comparison with IEA Forecasts
OPEC’s projections for oil demand growth in 2024 exceed those of the International Energy Agency (IEA). The IEA, representing industrialized countries, is expected to update its forecasts in the coming days.
Long-Term Outlook and OPEC’s Stance
OPEC and the IEA have previously clashed over issues such as long-term demand and the need for investment in new supply. While the IEA envisions oil demand peaking by 2030 as the world transitions to cleaner energy, OPEC holds a different view.
OPEC’s Market Support Measures
OPEC, along with the wider OPEC+ alliance, has implemented output cuts since late 2022 to bolster the market. A new cut for the first quarter of this year recently took effect.
OPEC Oil Production
The OPEC report highlighted a 350,000 bpd decline in oil production in January, attributed to a new round of voluntary output cuts by the OPEC+ alliance for the first quarter.
Overall, OPEC’s outlook reflects a positive stance on oil demand and economic growth, with potential for further expansion in the coming years.
