Underwhelming data so far this year and expectations of softening Chinese demand growth prompted OPEC to cut its forecasts of global oil demand growth this year and next, in the first downward revision since the organization issued its initial estimate for 2024 a year ago.
Global oil demand is set to grow by 2.11 million barrels per day (bpd) in 2024, a still “healthy” growth pace, well above the historical average of 1.4 million bpd seen prior to the pandemic, OPEC said in its Monthly Oil Market Report (MOMR) published on Monday.
But the latest demand growth estimate is 135,000 bpd lower than the assessment of a 2.25 million bpd increase from July. The downward revision reflected actual consumption data for the first and second quarters of this year, “as well as softening expectations for China’s oil demand growth in 2024,” OPEC said.
Total world oil demand is anticipated to reach 104.3 million bpd in 2024, bolstered by strong air travel demand and road mobility, including trucking, as well as healthy industrial, construction and agricultural activities in non-OECD countries, according to the cartel.
OPEC also trimmed its 2025 demand growth forecast to 1.78 million bpd, slightly lower than the increase of 1.85 million bpd expected in last month’s report.
“The global growth forecast is subject to many uncertainties, including global economic developments,” OPEC said.
The latest monthly report contained the first acknowledgment by the organization that Chinese oil demand growth could disappoint this year.
The latest signals from China have been of sluggish economic indicators and uncertainties about whether the authorities could manage to reinvigorate the economy.
Despite OPEC’s first downward revision to its 2024 oil demand growth forecast, the gap between the cartel’s growth assessment and that of the International Energy Agency (IEA) remains at more than 1 million bpd more optimistic outlook from OPEC.
The IEA’s monthly report is due out on Tuesday, August 13, and could see another downward revision from the agency, which has been flagging weaker oil demand growth, including in China, so far this year.