The Organisation of the Petroleum Exporting Countries (OPEC) has slightly revised down global crude oil demand forecast for 2024, citing softer intake by China. The world oil demand growth forecast for 2024 is revised down slightly by 135,000 barrels per day from the previous month’s assessment, standing at a healthy 2.1 million barrels per day. This is well above the historical average of 1.4 million barrels per day seen prior to the COVID-19 pandemic. This slight revision reflects actual data received for the first quarter of 2024 and softening expectations for China’s oil demand growth in 2024.
Oil demand from OECD countries is expected to grow by around 0.2 million barrels per day in 2024, while non-OECD oil demand is expected to increase by around 1.9 million barrels per day. In 2025, world oil demand is also revised slightly down by 65 tb/d, reaching about 1.8 mb/d. OECD demand is expected to expand by about 0.1 mb/d in 2025, with OECD Americas contributing the largest increase. Non-OECD demand is set to drive next year’s growth, increasing by about 1.7 mb/d, led by contributions from China, the Middle East, Other Asia, and India.
Between January and April, oil futures prices rallied, with ICE Brent and NYMEX WTI front-month contracts rising by 12.4 per cent and 14.3 per cent, respectively. This was supported by robust physical crude market fundamentals, easing speculative selling, higher risk premiums, and several unplanned supply outages. Resilient global economic growth and positive economic indicators from the US and India also supported market sentiment. However, uncertainties related to China’s economic outlook, US Fed’s monetary policy, and a strengthening US dollar limited the upward momentum.
Between May and July, oil prices declined due to sentiment driven by speculative selloffs, easing geopolitical risk premiums, and mixed economic indicators. Uncertainties surrounding central bank monetary policies, particularly prospects for prolonged high interest rates in the US to address ongoing inflation, also affected market sentiment. Concerns about China’s economic performance and demand growth, as well as a slower-than-expected onset of the driving season, contributed to the downward pressure on prices according to OPEC.
In conclusion, while the global crude oil demand forecast for 2024 has been slightly revised down by OPEC, it remains healthy at 2.1 million barrels per day. Oil demand from OECD countries is expected to grow marginally, while non-OECD demand is set to drive growth in 2025. Oil prices rallied between January and April but saw a decline between May and July due to various factors affecting market sentiment. As uncertainties continue to impact the oil market, monitoring key indicators such as economic growth, central bank policies, and demand from major economies like China will be crucial for understanding future trends in the oil industry.
