Opec trims oil demand growth forecasts again

Opec has cut its global oil demand growth forecasts for 2024 and 2025 for a second month in a row, but its projection for demand remains way above other outlooks.

In its latest Monthly Oil Market Report (MOMR) the producer group revised down its 2024 demand growth projection to 2.03mn b/d from 2.11mn b/d. This is mainly due to lower than previously expected oil demand growth from China and the US.

It now sees China's oil demand growing by 650,000 b/d this year, compared with 700,000 b/d in the previous report. It cut US oil demand growth by 60,000 b/d to 110,000 b/d.

Opec's forecast for this year remains bullish. The IEA projects oil demand will increase by 970,000 b/d this year, and the EIA sees demand rising by 1.1mn b/d. Opec noted its 2mn b/d growth forecast for this year "remains well above the historical average of 1.4mn b/d seen before the Covid-19 pandemic."

Oil prices have declined sharply in early September following weaker-than-expected economic data from the US and China. And on 5 September eight members of the Opec+ alliance agreed to delay a plan to start increasing output by two months.

Opec also today cut its oil demand growth forecast for next year, by 40,000 b/d to 1.74mn b/d, again mainly driven by lower consumption growth estimates this time in the Middle East.

On the supply side, the group has kept its non-Opec+ liquids growth estimate for 2024 and 2025 unchanged at 1.23mn b/d and 1.10mn b/d, respectively.

Opec+ crude production — including Mexico — fell by 304,000 b/d to 40.655mn b/d in July, according to an average of secondary sources that includes Argus. This is about 2.15mn b/d below Opec's projected call on Opec+ crude for this year, which stands at 42.8mn b/d.

By Aydin Calik