OPEC has revised its global oil demand growth forecast for 2024, citing softer-than-expected economic performance in China. In a significant shift, the Organization of the Petroleum Exporting Countries reduced its estimate from 2.25 million barrels per day (bpd) to 2.11 million bpd, marking the first cut in its 2024 forecast since July 2023.
This adjustment underscores the challenges faced by the OPEC+ alliance as it considers raising production starting in October. The downgrade comes amid growing concerns over China’s economic slowdown, particularly in the diesel consumption sector, and the ongoing crisis in the Chinese property market, which has further dampened economic growth.
The report from OPEC highlights the broader uncertainty in global demand projections, especially regarding China’s future oil consumption and the global shift towards cleaner energy sources. While OPEC remains at the higher end of industry forecasts, it trails behind the more conservative estimates of the International Energy Agency (IEA), which presents a significantly lower demand outlook.
OPEC’s revision reflects data from the first half of 2024 and acknowledges the reduced optimism for China’s oil demand in the coming year. Despite the adjustment, OPEC noted that the demand growth for 2024 still exceeds the pre-pandemic average of 1.4 million bpd, buoyed by strong summer travel demand and ongoing recovery from the COVID-19 pandemic’s impact on global oil consumption.
