Opec maintains stance on oil demand predictions

Alamy via Reuters

• Oil demand predictions unchanged
• 2.2m bpd rise expected
• Crude prices down 8%

Opec has kept its global oil demand prediction unchanged for this year as the global economy showed resilience, surpassing initial projections in some instances.

The oil producers block said in its monthly report on Tuesday that it believed global crude demand would increase by 2.2 million barrels per day (bpd) in 2024 and by 1.8 million bpd in 2025.

Its forecast for world economic growth remained the same for 2024 and 2025, at 2.8 percent and 2.9 percent, respectively.

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“Despite certain downside risks, the continued momentum observed since the start of the year could create additional upside potential for global economic growth in 2024 and beyond,” Opec said.

“China is already reporting better-than-expected growth in the first three months of the year.” 

However, geopolitical challenges continue to be a concern. 

“While underlying growth has remained steady, selective and potentially significant issues persist,” Opec said. 

Crude prices have lost around 8 percent in a month. Brent traded at $82.88 per barrel on Tuesday, while WTI was at $78.60 per barrel.

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The expanded Opec+ group, led by Saudi Arabia and Russia, will meet on June 1 to set output policy.

Earlier this week, Goldman Sachs said it no longer expects Opec+ to announce a partial unwind of voluntary production cuts during the next meeting.

Iraq’s oil minister, Hayan Abdul Ghani, said on Saturday that Iraq had reduced output enough and “will not agree to any new cut.” 

Secondary sources say total Opec crude oil production averaged nearly 26 million bpd in April. Crude oil output increased mainly in the Republic of Congo and Iran, while production in Nigeria, Iraq and Venezuela decreased. 

Non-Opec production averaged around 14.5 million bpd in the same month. Output increased mainly in Bahrain, while production in Russia and Kazakhstan decreased.

Oil demand in the Middle East is expected to decline slightly in the second half of the year, offsetting increased demand from China seen in the first quarter of 2024.