OPEC Slashes Oil Demand Growth Estimate Again (For The 4th Straight Month)

Authored by Tsvetana Paraskova via OilPrice.com,

• OPEC lowered its global oil demand growth forecast for 2024 and 2025 due to weaker demand revisions in China and other Asian markets.

• This marks the fourth consecutive month of downward revisions by OPEC, reflecting concerns about a slowdown in China’s economic growth.

• OPEC’s reduced demand forecast may impact its production cut decisions and lead to a weaker oil market outlook.

For a fourth consecutive month, OPEC slashed on Tuesday its estimate of global oil demand growth for both this year and next, citing downward revisions in China and other Asian markets after seeing actual consumption data year to date.

OPEC now expects global oil demand to grow by 1.82 million barrels per day (bpd) this year, down by 107,000 bpd from last month’s assessment, the cartel said in its closely-watched Monthly Oil Market Report.

Total world oil demand is anticipated to reach 104.0 million bpd in 2024, bolstered by strong transportation fuel demand and ongoing healthy economic growth, particularly in a number of non-OECD countries, said OPEC.

However, the organization made today its fourth downward adjustment of demand growth estimates for the world and China for the fourth consecutive month.

OPEC’s latest downward revision of demand forecasts follows its decision from earlier this month to delay the beginning of the reversal of the production cuts to January 2025 from December 2024.

The downward revision of global demand growth forecasts reflected yet another reduction in OPEC’s expectations of Chinese oil demand growth.

OPEC cut China’s demand growth forecast to 450,000 bpd this year, down from 580,000 bpd growth expected last month. The assessment of Chinese oil demand growth in 2025 was also cut by around 100,000 bpd and OPEC now sees Chinese demand growing by just 310,000 bpd in 2025, down from a previous projection of 410,000 bpd growth.

“The report maintains a cautiously optimistic outlook for 2024, supported by the strong fundamentals of the industrial and export sectors, as well as the central government’s ability to implement policy measures to tackle challenges in other areas, including the property sector and sluggish consumer demand,” OPEC said, referring to China’s near-term economic and oil demand prospects.

The cartel also lowered by 103,000 bpd its projection of global oil demand growth for 2025 and now expects it at 1.54 million bpd year-over-year, down from 1.64 million bpd growth projected in the October report.