By The Organization of the Petroleum Exporting Countries (OPEC) trimmed its forecast for growth in global oil demand for both 2024 and 2025 on Monday for the third consecutive month.
The reduction in forecasts follows lower oil demand in some regions across the world, OPEC said in its September Oil Market Report.
Growth in oil demand in 2024 has been revised down due to adjustments in Organization for Economic Cooperation and Development countries in April-June.
OPEC said in the report:
In the non-OECD, some adjustments were implemented, reflecting actual data as well as slightly lower expectations for the performance of some regions.
Meanwhile, oil production by OPEC declined in September on a month-on-month basis. Also, overall production by OPEC and its allies fell during the last month.
OPEC cuts demand forecasts
The cartel on Monday cut its forecast for growth in global oil demand in 2024 by 106,000 barrels per day. It now expects global oil demand to increase by 1.9 million barrels per day this year.
“The adjustment reflects actual data received, combined with slightly lower expectations for some regions,” it said.
OECD oil demand is forecast to grow by just 100,000 barrels per day in 2024 compared with last year.
Most of the growth will be confined to non-OECD countries such as China and India this year. Non-OECD oil demand is forecast to increase by 1.8 million barrels per day this year.
For 2025, oil demand growth has been revised down by 102,000 barrels per day. Next year, oil demand is expected to grow by a further 1.6 million barrels per day, OPEC said.
The cartel said:
Non-OECD oil demand is set to drive next year’s growth, increasing by about 1.5 mb/d, y-o-y, led by contributions from China, Other Asia, the Middle East, and India.
Non-OPEC supply growth
The cartel kept its forecast for growth in oil supply from outside OPEC+ unchanged for 2024 and 2025.
In 2024, the non-OPEC oil supply is likely to increase by 1.2 million barrels per day to an average of around 53.1 million barrels per day. “The main growth drivers are expected to be the US, Canada, Brazil and China.”
Next year, oil supply from countries outside the OPEC+ alliance is expected to increase by 1.1 million barrels per day, the cartel said. “Growth is anticipated to be mainly driven by the US, Brazil, Canada, and Norway.”
Next year, the total oil supply from non-OPEC countries is expected to be 54.2 million barrels per day.
OPEC crude oil production falls in September
In September, crude oil production by the 12 permanent members of OPEC was 26.04 million barrels per day, down 604,000 barrels per day from the previous month.
Iraq’s production fell 155,000 barrels per day to 4.11 million barrels per day last month. The country’s oil production fell as it compensated for overproduction earlier this year.
Eight members of OPEC+, including Iraq have been cutting oil production voluntarily by 2.2 million barrels per day since the beginning of this year.
Saudi Arabia, the de facto leader of the group, had urged members to maintain full conformity with the production quotas and output cuts last month.
The Kingdom’s oil production fell 23,000 barrels per day to 8.97 million barrels per day in September, secondary data from the report showed.
Libya’s production declined by the most in the group, falling 410,000 barrels per day from August to 540,000 barrels per day last month.
In terms of overall production by OPEC and its allies, production fell from 557,000 barrels per day to 40.10 million barrels per day in September.
Kazakhstan has been under the pump to adhere to production cut quotas, producing 75,000 barrels per day more last month, which took its output to 1.55 million barrels per day.
Oil prices decline as OPEC cuts demand forecasts
Oil prices plunged more than 2% on Monday as OPEC cut forecasts for growth in global demand.
Prices have been under pressure since earlier in the session as concerns over deflation and poor demand from China weighed on sentiments.
At the time of writing, the West Texas Intermediate crude oil was down 2.2% at $73.92 per barrel, while Brent was at $77.42 per barrel, down 2.1% from the previous close.
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