OPEC cuts oil demand growth forecast for 2024, citing China By Reuters

By Alex Lawler

LONDON (Reuters) – OPEC cut its forecast for global oil demand growth in 2024 on Monday, citing weaker-than-expected data for the first half of the year and weaker expectations for China, and cut its outlook for next year.

The Organization of the Petroleum Exporting Countries said in a monthly report that global oil demand will rise by 2.11 million barrels per day in 2024, down from the 2.25 million bpd rise it forecast last month.

“This slight revision reflects the actual data received for the first quarter of 2024 and in some cases the second quarter, as well as the lowering of expectations for China’s oil demand growth in 2024,” OPEC said in the report.

“Despite a slow start to the summer driving season compared to the previous year, demand for transportation fuel is expected to remain robust thanks to healthy road and air mobility.”

This is the first reduction in OPEC’s forecast for 2024 since it was first made in July 2023. There is a wider than usual split between those forecasting the strength of oil demand growth in 2024 due to differences with China and, in generally, on the world rhythm. switching to cleaner fuels.

The cut still leaves OPEC at the top of industry estimates. Oil was flat after the report was released, trading above $80 a barrel.

In the report, OPEC also cut its demand growth estimate for next year to 1.78 million bpd from 1.85 million bpd previously expected.

OPEC+, which groups OPEC and allies such as Russia, has implemented a series of production cuts from late 2022 to support the market. The group agreed on June 2 to extend the most recent cut of 2.2 million bpd until the end of September and phase it out from October.

The International Energy Agency, which represents industrialized countries, sees a much lower demand growth than OPEC of 970,000 bpd in 2024. The IEA is also updating its figures this week.