Opec on Tuesday cut its forecast for global oil demand growth in 2024 reflecting data received so far this year and also trimmed its expectation for next year, marking the producer group’s second consecutive downward revision.
The weaker outlook further underscores the challenge faced by Opec+, which comprises the Organisation of the Petroleum Exporting Countries and allies such as Russia in balancing the market. Last week, Opec+ delayed a plan to start pumping more oil after prices hit the lowest in 2024.
On Tuesday, Opec in a monthly report said world oil demand will rise by 2.03 million barrels per day (bpd) in 2024, down from growth of 2.11 million bpd it expected last month
China accounted for the bulk of the downgrade, as Opec trimmed its forecast of Chinese growth to 650,000 bpd in 2024 from 700,000 bpd. Oil use in the world’s second largest economy was facing headwinds from economic challenges and moves to cleaner fuels, Opec said.
“Looking ahead, China’s economic growth is expected to remain well supported,” Opec said in the report.
“However, headwinds in the real estate sector and the increasing penetration of LNG trucks and electric vehicles are likely to weigh on diesel and gasoline demand going forward.”
Oil added to an earlier decline after the report was issued, with Brent crude trading below $71 a barrel, near the lowest price since March 2023.
There is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over China and more broadly over the pace of the world’s transition to cleaner fuels. The reduction still leaves Opec at the top end of industry estimates.
Opec also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd.