OPEC has lowered its oil demand growth forecast for the fourth consecutive month.

OPEC has once again lowered its forecasts for oil demand growth for 2024, marking the fourth consecutive month of adjustments. This reflects the ongoing slowdown in key consumer markets, particularly in China.

Bloomberg writes about this.

According to the organization's latest monthly report, global oil demand is expected to rise by 1.8 million barrels per day (less than 2%) in 2024, which is 107,000 barrels per day lower than the previous forecast. This reduction is linked to data from major oil-consuming markets, including China, India, and parts of Africa.

Since July, OPEC has cut its oil demand growth forecasts by nearly 18%, reflecting a sharp decline in oil prices. However, the cartel's outlook remains significantly more optimistic compared to other market participants. While Wall Street banks, trading houses, and Saudi Aramco have lowered their projections, OPEC expects growth to be twice that of the International Energy Agency (IEA) forecasts.

Despite these adjustments, OPEC+ continues to adhere to its production increase plans, although these increments have been postponed twice and will now be reviewed at the meeting on December 1. The production increase, initially scheduled for October, will begin gradually at the start of the next year.

Oil prices have dropped by 18% since July, trading around $72 per barrel, as market participants began to believe that geopolitical risks, including conflicts in the Middle East, are unlikely to disrupt oil export supplies. Instead, market attention has shifted to the economic slowdown in China, where oil demand has been decreasing for several months due to domestic economic issues.

In the future, oil demand forecasts may change due to political shifts, such as Donald Trump's potential return to the presidency. He previously imposed trade tariffs on China and targeted OPEC members, including Iran. Trump's stance on oil exports and energy policies could significantly impact the global market.

In the meantime, OPEC+ members have started to improve compliance with production cut commitments. For instance, Kazakhstan reduced its output by 292,000 barrels per day in October, slightly below the agreed quota. Iraq and Russia are also gradually adjusting their production according to the agreements.

OPEC predicts that global oil consumption will average 104 million barrels per day in 2024, with demand expected to rise by another 1.5 million barrels per day in 2025. However, this is 103,000 barrels per day lower than previously anticipated.

OPEC's competitor, the International Energy Agency (IEA), is preparing to release its new assessment of global oil markets this week. They are expected to emphasize the transition from fossil fuels to electric vehicles, which could further dampen oil demand growth in the future.

Background. Earlier, Mind reported that global oil prices are rising following OPEC+'s decision to postpone production increases.