OPEC cuts 2024 oil demand growth forecast, citing China

Image credit: JOE KLAMAR/ Getty Images

The Organization of the Petroleum Exporting Countries (OPEC) on Monday cut its forecast for global oil demand growth in 2024, citing weaker-than-expected data for the first half of the year and softer expectations for China. It also trimmed its expectations for next year.

OPEC, in its monthly report, said world oil demand will rise by 2.11 million barrels per day (bpd) in 2024, down from growth of 2.25 million bpd expected last month.

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

“Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility.”

This is the first reduction in OPEC’s 2024 forecast since it was first made in July 2023. There is a wider-than-usual split between forecasters on the strength of oil demand growth in 2024 due to differences over China and, more broadly, the pace of the world’s transition to cleaner fuels.

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

OPEC also slashed next year’s demand growth estimate to 1.78 million bpd from 1.85 million bpd previously expected.

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

Read: Oil set for 3% weekly gain on rising Middle East tension, better US outlook