OPEC still too bullish on demand despite downward revision – Commerzbank

In its monthly report published yesterday, OPEC revised down its demand forecast for the first time for a while, notes Commerzbank commodities analyst Carsten Fritsch.

OPEC regains optimism about global demand

“According to the report, global oil demand will increase by 2.1 million barrels per day this year. This is 135 thousand barrels per day less than in the previous forecast. For 2025, OPEC continues to expect an increase in demand of 1.8 million barrels per day. The forecast reduction is primarily due to a weak first quarter, which was reduced by 400 thousand barrels per day.”

“In contrast, the corrections in the other quarters were considerably smaller. Despite the forecast cut, OPEC remains significantly more bullish on demand than other market watchers. The IEA confirmed today that it expects demand to grow by just under 1 million barrels per day this year and next.”

“If OPEC+ estimated demand is compared to current OPEC+ production, the oil market will remain significantly undersupplied according to OPEC’s forecasts, even if voluntary production cuts by some OPEC+ countries are gradually reversed from October, as predicted. However, despite the downward revision, we believe that OPEC’s demand forecast is still far too optimistic and that the estimated call to OPEC+ is therefore too high.”