OPEC sticks to 2024 oil demand growth forecast, but trims Q1 view

OPEC on Tuesday stuck to its forecast for relatively strong growth in global oil demand in 2024, despite lower than expected use in the first quarter, saying travel and tourism would support consumption in the second half of the year.

The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

In the report, OPEC said steady global economic growth has continued in the first half of 2024 and forecast world oil demand will rise by 2.3 million bpd in the second half.

“Globally, the services sector maintains a stable momentum,” OPEC said.

“It is projected to be the main contributor to the economic growth dynamic in the second half of 2024, particularly supported by travel and tourism, with a consequent positive impact on oil demand.” OPEC lowered its estimate of total demand in the first quarter of this year by 50,000 bpd to 103.51 million bpd and increased its forecast for the second quarter by the same 50,000 bpd increment. OPEC+, which groups OPEC and allies such as Russia, 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. There is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over the pace of the world’s transition to cleaner fuels.

The International Energy Agency, which represents industrialised countries, sees a much lower expansion than OPEC of 1.1 million bpd. It updates its figures this week.