OPEC releases global oil demand growth forecast

OPEC forecasts that global oil demand will grow by an average of 2.3 mn bpd, year-on-year in the second half of 2024. (Image source: Adobe Stock)

Industry

In an article on world oil market prospects for the second half of 2024, in its June monthly oil market report, OPEC forecasts that global oil demand will grow by an average of 2.3 mn bpd year-on-year in the second half of 2024, and by 2.2mn bpd for 2024 in total

OPEC notes that steady global economic growth has continued in the first half of 2024. Growth in non-OECD economies has held up quite well, and better than expected in the BRIC economies. If growth in major OECD economies accelerates in the second half of the year, with non-OECD economies maintaining the momentum of the first half of the year, economic growth for the year could potentially improve further. At present, OPEC’s global economic growth forecast stands at 2.8% for 2024 and 2.9% for 2025, unchanged from OPEC’s May assessment.

China the primary oil demand driver

Demand growth will be driven by non-OECD oil demand, forecast to grow on average by 2.1mn bpd, year-on-year, in the second half of 2024, with China expected to be the primary oil demand driver. The ongoing air travel recovery, healthy driving levels, as well as improvements in manufacturing sector activities are projected to support jet/kerosene, gasoline and distillate demand in the region.

In the OECD, oil demand is estimated to increase by 0.25mn bpd, year-on-year, in the second half of 2024, driven mainly by the USA. Jet kerosene and gasoline are anticipated to be the main regional oil demand drivers, on the back of the summer driving season and continued healthy air travel activity.

OPEC forecasts that in 2025, global oil demand will see see robust growth of 1.8mn bpd, year-on-year, again led by demand in the non-OECD region, which is forecast to increase by 1.7mn bpd.

In anticipation of the OPEC and IEA monthly reports and demand forecasts, and with hopes of increased summer demand, Brent crude has risen slightly to around US$81/bbl, following three weeks of losses related to the OPEC+ agreement to phase out some production cuts later this year.