OPEC Maintains Its Rosy Outlook For Oil Demand In 2024

OPEC is expected to keep a bullish view on next year’s oil demand growth when it publishes its outlook on July 13, according to sources. Anonymous OPEC sources who spoke to Reuters said on Thursday that OPEC’s 2024 demand outlook will likely remain upbeat and above average, although lower than this year’s oil demand growth.

For 2023, OPEC said in its June report that oil demand growth was expected to be 2.35 million bpd—a 2.4% increase over 2022, and a rather high rate that comes only after a couple of years of sluggish demand courtesy of the coronavirus pandemic. This was a slight increase from its May report that forecast 2.33 million bpd.

OPEC’s 2024 oil demand growth is expected to be below the 2.35 million bpd forecast for this year, although the group is still expected to forecast above-average growth next year. It will also likely be above IEA projections, which are anticipating a mere .86 million bpd growth.

Three OPEC sources said that the oil demand growth slowdown next year won’t be as severe as the IEA projects—and still above 1 million bpd. A fourth source that Reuters described as close to OPEC said that the demand growth would likely be above 1.5 million bpd.

OPEC’s bullish view of 2024 oil demand growth comes as OPEC heavyweight Saudi Arabia raised its crude oil prices to Asia today, and follows Aramco’s CEO Amin Nasser’s comments earlier this week that oil demand growth out of China and India alone was 4 million barrels per day between 2019 and 2023.

In its latest monthly report, however, OPEC cautioned readers of “rising uncertainties regarding economic growth” in the second half of this year thanks to inflation, rising interest rates, and tight labour markets. It also pointed to geopolitical conflicts in Eastern Europe as adding yet another layer of uncertainty to oil demand growth forecasts.

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