This Monday, OPEC revised its forecast for global oil demand growth slightly downwards to 2.07% in 2024 and 1.71% in 2025, mainly due to a slowdown in China’s consumption of “black gold”.
The planet will burn an average of 104.32 million barrels of oil a day this year, 2.1 million barrels a day more than in 2023 and 135,000 barrels a day less than forecast a month ago, OPEC (Organization of the Petroleum Exporting Countries) said in its monthly report published in Vienna on Monday.
In addition, the document published this Monday reduces the previous estimate of oil consumption in 2025 by 200 thousand barrels per day, to 106.11 million barrels per day.
These estimates are based on global economic growth of 2.9%, the same growth this year as next.
The downward revision to oil consumption figures reflects “a slowdown in expectations for China’s oil demand growth in 2024” as well as adjustments related to new market data for the first six months, the report explained.
Despite the downward revision, OPEC calls market dynamics “healthy,” especially this year, with demand growth “well above the pre-Covid-19 average of 1.4 million barrels per day.”
However, he acknowledges that “uncertainty surrounding China’s economic outlook and the US Federal Reserve’s monetary policy, as well as a stronger dollar, have limited the upward momentum” in oil prices.
In this context, recall the recovery between January and April, when Brent and Texas Intermediate Oil (WTI) prices rose by 12.4% and 14.3% respectively, gains that were then reversed between May and July.
Brent crude oil traded above $80 a barrel on Monday, while WTI crude was close to $78 a barrel.
Among the factors contributing to the decline, OPEC highlights “concerns about China’s economic performance.”
“Market sentiment was also impacted by uncertainty surrounding central bank monetary policy, in particular the prospect of keeping US interest rates high as a way to combat ongoing inflation,” he adds.
On the oil supply front, the report, as it did last month, forecasts that non-OPEC+ supply (OPEC and its allies, including Russia) will increase by 1.2 million barrels and 1.1 million barrels per day in 2024 and 2025, respectively, to 53 million barrels.
The United States, Brazil, Canada and Norway will be the producers that increase crude oil production the most.
On the other hand, the OPEC+ alliance maintains sharp supply cuts in accordance with existing agreements.
However, according to data from independent institutes published in the document, the group’s combined output rose last month to about 41 million barrels, up 117,000 barrels a day from June.
Saudi Arabia (+97,000 bpd), Iraq (+57,000 bpd) and Iran (+20,000 bpd) were the countries that contributed the most to this increase, thus outpacing declines in Kazakhstan, Russia and Libya.
Author: Lusa
Source: CM Jornal
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