IGI Logo

OPEC revised its global oil demand growth forecast for 2024 to 1.93 million barrels per day (bpd), down from the 2.03 million bpd predicted earlier, citing economic concerns and a shift towards cleaner fuels. China’s demand forecast was lowered due to slowing economic activity and LNG substitution. Meanwhile, Russia reduced its oil production to 9 million bpd in September, slightly above the OPEC+ quota. OPEC acknowledged that Russia, Iraq, and Kazakhstan exceeded their quotas but promised to adjust future production to compensate. The outlook remains uncertain amid divergent views on global demand growth and the impact of economic challenges.

Key Highlights

OPEC revised 2024 global oil demand growth to 1.93 million bpd.

China’s demand forecast was cut to 580,000 bpd due to economic headwinds.

Russia reduced its crude oil output in September to 9 million bpd.

Russia, Iraq, and Kazakhstan exceeded OPEC+ production quotas.

Russia pledged future output cuts to offset overproduction.

OPEC has revised its 2024 global oil demand growth forecast downward to 1.93 million barrels per day (bpd), compared to last month's estimate of 2.03 million bpd. The cut marks the third consecutive downward revision, driven by economic uncertainties and a shift toward cleaner energy alternatives. The adjustment is primarily attributed to China, where demand is expected to increase by 580,000 bpd, down from the previously forecasted 650,000 bpd. Despite government measures to stimulate the economy, oil demand is under pressure due to slower building and construction activities, as well as LNG increasingly substituting diesel in heavy trucks.

On the supply side, Russia's oil production saw a slight decline in September, falling by 28,000 bpd to around 9 million bpd. This figure remains slightly above the OPEC+ quota of 8.98 million bpd. OPEC's monthly report indicated that production in August was revised down to 9.029 million bpd. The OPEC+ group, which includes Russia and other allies, has undertaken significant output cuts since late 2022 to stabilize oil prices. Russia, Iraq, and Kazakhstan were identified as having exceeded production limits, with Russia pledging to make up for its excess output in upcoming months.

The outlook for global oil demand remains divided, with uncertainties stemming from economic challenges and the global push towards cleaner energy.

Finally

OPEC’s latest demand forecast reflects cautious optimism amid economic uncertainties, with production cuts potentially stabilizing prices if followed through.

Above views are of the author and not of the website kindly read disclaimer