Energy
Wednesday, November 13th, 2024 6:14 pm EDT
Key Points
- OPEC’s Demand Forecast Reduction: OPEC cut its global oil-demand growth forecast for 2024 to 1.82 million barrels per day, marking the fourth consecutive downward revision due to weaker demand from China, India, and other regions.
- Impact on OPEC+ Output Plans: The lower demand outlook poses a challenge for OPEC+, which recently postponed plans to raise oil output in December amid declining prices.
- China’s Contribution to the Downgrade: China was a significant factor in the revised forecast, with reduced growth expectations and a consistent drop in diesel demand, contributing heavily to the overall downgrade.
The Globe and Mail reports in its Wednesday, Nov. 13, edition that OPEC reduced its global oil-demand growth forecast for this year and next, citing weaknesses in China, India and other regions. A Reuters dispatch to The Globe reports that this marks the fourth consecutive downward revision in the 2024 outlook. The weaker outlook highlights the challenge facing OPEC+, which earlier this month postponed a plan to start raising output in December against a backdrop of falling prices. In a monthly report on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels a day in 2024, down from growth of 1.93 million b/d forecast last month. Until August, OPEC had kept the outlook unchanged since its first forecast in July, 2023. In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million b/d from 1.64 million b/d. China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 b/d from 580,000 b/d and said diesel use in September fell year-on-year for a seventh consecutive month. Oil pared gains after the report was issued, with Brent crude trading below $73 (U.S.) a barrel. Forecasts on the strength of demand growth in 2024 vary widely.
