OPEC Cuts Oil Demand Forecast for Third Month, Market Eyes Output Plans

OPEC expects global oil demand to be 104.1 million barrels/day in 2024, down from 104.2 million barrels/day last month, a reduction of 106,000 barrels;Considering the new market situation—weaker con...

OPEC expects global oil demand to be 104.1 million barrels/day in 2024, down from 104.2 million barrels/day last month, a reduction of 106,000 barrels;

Considering the new market situation—weaker consumption and increased supply in the Americas, observer organizations suspect that the organization may suspend or revoke the "increase production" plan.

October 14th news

The Organization of the Petroleum Exporting Countries (OPEC) has finally realized that global fuel consumption has slowed down, and the organization has lowered its expectations for the growth of world oil demand for this year and next year for the third consecutive month.

Local time on Monday (October 14th), OPEC, headquartered in Vienna, released its monthly oil market report on its official website. The organization expects global oil demand to be 104.1 million barrels/day in 2024, down from 104.2 million barrels/day last month, a reduction of 106,000 barrels.

Considering the demand for 2023 at 102.2 million barrels/day, the growth rate for this year has decreased from 2 million barrels/day to 1.9 million barrels/day. OPEC explained that this revision is "mainly due to the actual data received and slightly lower expectations in some regions".OPEC also revised down its global oil demand forecast for 2025 from 106 million barrels per day to 105.8 million barrels per day in its report. This implies a growth rate reduction from 1.7 million barrels per day to 1.6 million barrels per day between 2024 and 2025, indicating that the organization is retreating from its previously bullish stance.

It should be noted that, although OPEC has lowered its expectations for three consecutive months, its forecast values are still significantly higher than those of Wall Street banks and trading companies, close to the upper limit of Saudi Aramco's expectations, and about twice the forecast figures of the International Energy Agency (IEA).

According to the statement in September, OPEC+ plans to gradually phase out the 2.2 million barrels per day production cut starting from December. However, given the new market situation—weaker consumption and increased supply in the Americas—observers suspect that the organization may pause or revoke the "production increase" plan.

Boosted by conflicts in the Middle East, Brent crude prices have rebounded recently and are currently around $77 per barrel, but this figure is a bit too low for some member countries.

There were previous reports that the Saudi government was ready to abandon its unofficial crude oil price target of $100 per barrel, which means it was ready to increase production, even though this move could lead to a long-term decline in oil prices.Earlier this month, the Hamad government, which controls eastern Libya, announced the lifting of the force majeure status on all oil fields and ports, resuming oil field production and export operations.