The Organization of Petroleum Exporting Countries (OPEC), has further downgraded its forecast for oil-demand growth, as it prepares to marginally increase crude supply by some barrels into the market in spite of weaker global prices.
A report cited in TradeBriefs, published by Mint Premium of The Wall Street Journal, indicated that the Vienna-based cartel now expects demand to grow by 1.93 million barrels per day this year and 1.64 million barrels per day in 2025, from 2.03 million and 1.74 million barrels a day previously. This marks the group’s third consecutive downward revision of its forecast
“Demand is still seen at healthy levels overall-well above the historical average of 1.4 million barrels a day seen before the pandemic-bolstered by strong air travel and road mobility, as well as healthy industrial, construction and agricultural activities,” OPEC said.
The cartel reduced its forecast of Chinese growth to 580,000 barrels per day this year from previous expectations of 650,000 barrels-a-day growth, while total world demand is estimated to reach 104.1 million barrels per day in 2024 and 105.8 million in 2025.
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OPEC’s report came as oil prices erased nearly all gains made last week on persistent concerns over fuel demand in top crude importer China, after the country failed to provide details on the size of a stimulus package to revive its fortunes.
Brent crude, the international oil benchmark, currently trades around $77 per barrel, while the United States (U.S.) oil gauge West Texas Intermediate is around $74 a barrel.
Still, markets remain on edge, while awaiting Israel’s response to Iran’s missile barrage, fearing it might target oil infrastructure and potentially cause major disruptions across the region.
The geopolitical risk premium to oil is, though, mitigated by the lack of material disruptions so far and OPEC’s ample spare capacity.
