At last week’s meeting of the Joint Ministerial Monitoring Committee (JMMC), the OPEC+ panel monitoring market developments, the delegates reiterated their intention to begin adding oil supply in the fourth quarter.
But they also “reiterated that the gradual phase-out of the voluntary reduction of oil production could be paused or reversed, depending on prevailing market conditions.”
Global oil demand, including in the United States, is currently playing catch-up with forecasts, according to Reuters’s calculations of government data.
In China, faltering overall oil demand and lower crude imports result from weaker economic growth and lackluster gasoline and diesel demand below expectations.
OPEC continues to hold a much more optimistic view on oil demand growth than the International Energy Agency (IEA). The agency’s forecasts continue to diverge from OPEC’s estimates by more than 1 million bpd. In its July report, OPEC kept its global oil demand growth forecast for 2024 at 2.2 million bpd.
It is not clear if third-quarter demand growth will match OPEC’s estimates for this quarter, two sources at OPEC have told Reuters.
Demand growth needs to accelerate if OPEC+ wants to add more supply later this year without sinking oil prices, according to analysts.
The world’s biggest oil firm and top crude exporter, Saudi Aramco, holds a demand view closer to OPEC’s.
Earlier this week, Aramco’s chief executive Amin Nasser said that global oil demand is expected to rise by between 1.6 million bpd and 2 million bpd in the second half of the year, noting that the past week’s selloff doesn’t reflect fundamentals.