OPEC Lowers 2024-2025 Oil Demand Growth Forecasts Amid Weak Chinese Market

OPEC has further reduced its global oil demand growth forecasts for 2024 and 2025, citing economic weakness in key markets such as China and India. This marks OPEC’s fourth consecutive downgrade of its 2024 outlook, reflecting ongoing challenges for the group and its allies, collectively known as OPEC+.

In its monthly report, OPEC revised its 2024 demand growth projection to 1.82 million barrels per day (bpd), down from last month’s forecast of 1.93 million bpd. The organization also cut its 2025 estimate from 1.64 million bpd to 1.54 million bpd, with China accounting for much of the adjustment due to lower-than-expected diesel demand and a seven-month drop in diesel usage as the country shifts towards LNG-powered trucks.

The report dampened oil prices, with Brent crude trading below $73 a barrel. OPEC’s demand projections remain more optimistic than those of the International Energy Agency (IEA), which anticipates just 860,000 bpd growth for 2024 and is set to update its forecast on Thursday.

Production Adjustments and Rising Output

In response to declining demand, OPEC+ has implemented significant output cuts since 2022 to support prices. Though the group planned to start easing these cuts in December, weak demand has led OPEC+ to delay the adjustment until January. OPEC’s output rose in October, led by Libya’s production recovery, while some members, including Russia and Kazakhstan, produced above their assigned quotas.