OPEC again cuts outlook for global oil demand growth in 2024 and 2025 By Reuters

By Alex Lawler

LONDON (Reuters) – OPEC cut its forecast for global oil demand growth in 2024 on Tuesday, reflecting data received so far this year, and cut its expectations for next year, marking the producer group’s second consecutive downward revision.

The weaker outlook further underscores the challenge facing OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, in balancing the market. Last week, OPEC+ delayed a plan to start pumping more oil after prices hit their lowest level in 2024.

OPEC, in a monthly report on Tuesday, said global oil demand would rise by 2.03 million barrels per day (bpd) in 2024, down from the 2.11 million bpd increase expected last month past.

China accounted for most of the downgrade as OPEC cut its forecast for China’s growth to 650,000 bpd in 2024 from 700,000 bpd. Oil use in the world’s second-largest economy is facing headwinds due to economic challenges and a shift to cleaner fuels, OPEC said.

“Looking ahead, China’s economic growth is expected to remain well supported,” OPEC said in the report.

“However, headwinds from the real estate sector and increasing penetration of LNG trucks and electric vehicles are likely to impact demand for diesel and gasoline going forward.”

Oil added to an earlier decline after the report was issued, trading below $71 a barrel, near its lowest price since March 2023.

There is a wider than usual gap between those forecasting the strength of oil demand growth in 2024, partly because of differences with China and more generally because of the pace of the world’s transition to cleaner fuels. The cut still leaves OPEC at the top of industry estimates.

OPEC also cut its global demand growth estimate for 2025 to 1.74 million bpd from 1.78 million bpd.