Oil production by OPEC countries fell by 350,000 bpd in January 2024. File
| Photo Credit: Reuters
OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025 on February 13, and raised its economic growth forecasts for both years saying there was further upside potential.
The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.
A further boost to economic growth could give additional tailwind to oil demand. OPEC’s 2024 demand growth forecast is already higher than that of the International Energy Agency, although the wider OPEC+ alliance is still cutting output to support the market.
OPEC said a “positive trend” for economic growth was expected to extend into the first half of 2024 and raised its economic growth forecasts for 2024 and 2025 by 0.1 percentage points.
“Global economic growth remains robust,” OPEC said in the report. “Further upside potential could materialise in all major OECD and non-OECD economies.”
Oil prices have found support in 2024 from conflict in West Asia and supply outages, although concerns about continued high interest rates have weighed. Brent crude on Feb. 13 was trading around $82 a barrel, up 0.5%
OPEC, IEA clash over demand outlook
For this year, OPEC’s expectation of oil demand growth is much more than the expansion of 1.24 million bpd so far forecast by the IEA. The IEA, which represents industrialised countries, is scheduled to update its forecasts on Feb. 15.
OPEC and the IEA have clashed in recent years over issues such as long-term demand and the need for investment in new supply. The IEA sees oil demand peaking by 2030 as the world shifts to cleaner energy, a view OPEC dismisses.
Earlier on Feb. 13, OPEC’s Secretary General Haitham Al Ghais told Reuters he believed OPEC’s long-term demand outlook, which looks to 2045 and sees no peak in demand, is robust. OPEC and the wider OPEC+ alliance have implemented a series of output cuts since late 2022 to support the market. A new cut for the first quarter took effect last month.
The OPEC report also said that OPEC oil production fell by 350,000 bpd in January as a new round of voluntary output cuts by the OPEC+ alliance for the first quarter took effect.
