OPEC revised its global oil demand growth forecast for 2024 on Tuesday, marking the second consecutive month of downward adjustments. The updated outlook reflects data received this year, suggesting a slower pace of demand growth next year.
The reduced forecast highlights the ongoing challenge for OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, in managing the oil market.
Recently, OPEC+ delayed plans to increase oil production after prices reached their lowest point in 2024.
In its monthly report, OPEC projected a rise in global oil demand by 2.03 million barrels per day (bpd) in 2024, down from the 2.11 million bpd forecast made the previous month.
The bulk of the downgrade comes from China, where demand growth is now expected to reach 650,000 bpd in 2024, down from the earlier estimate of 700,000 bpd.
OPEC noted China’s economy is grappling with economic challenges and a shift towards cleaner energy sources.
“China’s economic growth is still expected to remain well supported,” OPEC noted in its report, but added that the real estate sector's struggles and the growing use of LNG trucks and electric vehicles could reduce demand for diesel and gasoline.
OPEC also lowered its global oil demand growth estimate for 2025, trimming it to 1.74 million bpd from a previous forecast of 1.78 million bpd.
In a note to clients this week, analysts at Morgan Stanley cut their Brent crude oil forecasts for the upcoming quarters. The bank believes the global oil market is encountering a period of demand weakness.