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)

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.

The signing ceremony. (Image source: Worley)

bp and Worley are building on their longstanding collaboration with the formation of a new strategic alliance across bp's global site projects, including in the Middle East

The alliance is designed to maximise efficiency, continuous improvement and value creation. It will save an initial estimated US$40mn over two years in locations where Worley holds a services contract, ie Gulf of Mexico, Oman, Mauritania and Senegal oil and gas producing regions and the Cherry Point, Whiting, Rotterdam, Gelsenkirchen, and Lingen refineries.

Deepening collaboration

bp and Worley will deepen collaboration across a portfolio of site projects by leveraging digital capability and global scale to further drive efficiency across engineering, procurement, construction development and management.

“We remain focused on improving safety, reducing emissions, high value activity, and reducing cost. This alliance increases our operational effectiveness through centralisation, standardisation and simplification, helping us safely grow the value of bp,” said Niall Maguire, VP Site Projects, bp.

“This alliance builds on our successful partnership in the Site Projects Efficiency Plan (SPEP) over the past two years, where we’ve worked together to drive down costs across bp’s global operations. Our shared history and values position us well to identify and implement solutions as we continue to create value and deliver sustainable change throughout bp’s portfolio of projects,” said Mark Brantley, group president EMEA and APAC, Worley.

Oil and gas upstream capex is at the highest level for a decade, according to the report. (Image source: Adobe Stock)

Oil and gas annual upstream capital expenditures rose by US$63bn year-on-year in 2023 and are expected to rise a further US$26bn in 2024, surpassing US$600bn for the first time in a decade, according to a new report from the International Energy Forum (IEF) and S&P Global Commodity Insights

More than 60% of the increase in upstream capex spent between now and 2030 will come from the Americas, according to the Upstream Oil and Gas Investment Outlook report. While the USA and Canada are expected to be the largest drivers of capex growth to 2030, Latin America plays an increasingly significant role in non-OPEC supply growth, particularly for conventional crude, with large expansions in Brazil and Guyana.

Continued upstream investment is still needed to both offset expected production declines and to meet future demand growth, the report highlights, forecasting that a cumulative US$4.3 trillion in new investments will be needed between 2025 and 2030. Annual upstream investment must increase by US$135bn or 22% to reach US$738bn by 2030, based on an outlook that sees demand for oil rising from 103mn bpd in 2023 to nearly 110mn bpd by 2030.

“This investment is vital for supporting energy security and enabling an orderly and equitable energy transition,” the report says. “The past two years have shown the negative impacts of disorderly transitions, such as price shocks, shortages, and a rise in geopolitical tensions.”

Oil demand will plateau, rather than peak and collapse, and could actually remain above 100mn bpd to 2050. However, there is a lot of uncertainty around the demand trajectory and the pace of the energy transition, creating a difficult environment for making investment decisions. Markets need to remain agile and adaptable to changing conditions.

"More investment in new oil and gas supply is needed to meet growing demand and maintain energy market stability, which is the foundation of global economic and social wellbeing," said Joseph McMonigle, secretary general of the IEF. "Well-supplied and stable energy markets are critical to making progress on climate, because the alternative is high prices and volatility, which undermines public support for the transition."

The contract includes Weatherford’s full suite of drilling technologies along with its Centro well construction optimisation platform. (Image source; Adobe Stock)

Weatherford has been awarded a new five-year contract with Bahrain’s Bapco Upstream, a subsidiary of Bapco Energies, to deliver directional drilling and logging while drilling services

The contract, which follows on from the drilling services contract that Weatherford was awarded in 2015, includes Weatherford’s full suite of drilling technologies along with its Centro well construction optimisation platform for high-quality reservoir-characterisation data. This end-to-end solution seamlessly integrates all well data for advanced multi-domain viewing and real time analytics of operations, facilitating collaboration, enhanced transparency, and advanced agility to maximise efficiencies for Bapco Energies while maintaining a cost-effective operation.

Girish Saligram, Weatherford President and CEO, commented, “I am pleased Bapco Energies selected Weatherford as it continues to advance its drilling programme. Weatherford has performed drilling services in Bahrain since 2016, and this award reaffirms our partnership and further showcases the value of our comprehensive drilling portfolio and cutting-edge digital capabilities.”