The Organisation of the Petroleum Exporting Countries (OPEC) announced Thursday that it anticipates a surge in world oil demand, projecting an increase of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025. In its latest monthly report, OPEC emphasized the robust fuel consumption expected during the summer months, maintaining its forecast for strong global oil demand growth in 2024. The forecast underscores a notable disparity in predictions regarding oil demand strength.
OPEC expressed a more optimistic stance on managing non-OPEC supply growth in the upcoming months, with downward revisions to expected production growth outside the bloc in 2024 and 2025, according to reports from S&P Global Ratings. The recent rise in oil prices, buoyed by coordinated production cuts within the OPEC+ alliance and geopolitical tensions in the Middle East and Europe, has prompted speculation among analysts that the group might consider easing some of its production cuts in the latter half of the year.
In its closely monitored monthly oil market report, OPEC reiterated its commitment to vigilance and readiness to take action alongside its allies if deemed necessary. “The robust oil demand outlook for the summer months warrants careful market monitoring, amid ongoing uncertainties, to ensure a sound and sustainable market balance,” OPEC stated. OPEC anticipates that non-OECD regions, particularly China, the Middle East, and other Asian countries, will be the main drivers of demand.
The group is scheduled to discuss policy on June 1, but it retains the option to convene earlier if market conditions warrant. OPEC’s forecasts indicate that non-OPEC supply is expected to grow by 1 million b/d in 2024, down by 100,000 b/d from its previous estimate released in early March. It also revised down its forecast for non-OPEC supply growth in 2025 by 100,000 b/d to 1.3 million b/d.
The bulk of this growth is anticipated to come from the US, Brazil, Canada, Russia, Kazakhstan, and Norway. OPEC’s projections for global demand growth, as well as its own crude oil demand in 2024 and 2025, remained unchanged, according to S&P Global Ratings. OPEC foresees global oil demand expanding by 2.2 million b/d in 2024, with slight adjustments to OECD Europe demand estimates offset by reductions in Africa and the Middle East. It anticipates a global demand growth of 1.8 million b/d in 2025.
The organization’s demand forecasts for its own crude remained steady at 28.5 million b/d in 2024 and 29 million b/d in 2025. The forecast for 2024 suggests a demand 1.9 million b/d above current production levels, potentially granting OPEC significant influence over oil prices this year if realized. OPEC reported that its March crude output increased by 3,000 b/d month-on-month to 26.6 million b/d, according to secondary sources, including S&P Global analysts.
On March 3, OPEC+ countries extended voluntary production cuts until the end of the second quarter. While most countries’ quotas will remain unchanged, Russia will transition to a reduction, aligning its crude production levels with Saudi Arabia’s in June, according to S&P Global Ratings. OPEC estimated OECD commercial oil stocks at 2.733 billion barrels as of February, marking a decrease of 25.7 million barrels month-on-month. This included an increase in crude stocks of 19.6 million barrels and a decline of 45.3 million barrels in product stocks.