Opec sticks to 2023 and 2024 oil demand forecast

Opec’s crude oil production in September rose by 273,000 bpd to 27.75 million bpd. Reuters

Opec on Thursday stuck to its forecast for oil demand growth for 2023 and 2024 and said it expects the global economy to grow at a faster pace this year.

World oil demand will rise by 2.25 million barrels per day (bpd) in 2024, compared with a growth of 2.44 million bpd this year, Opec said in its monthly oil market report.

Both forecasts were unchanged from last month’s assessment.

However, the oil producer’s group now expects the global economy to grow by 2.8 per cent this year, up slightly from its previous projection of 2.7 per cent growth.

“Emerging economies in Asia, notably India, as well as Brazil and Russia may outperform expectations with improvements in domestic demand and external trade,” Opec said.

“In 2024, solid global economic growth, amid continued improvements in China, is expected to further boost oil consumption,” the group said.

The Asian country's post-coronavirus economic recovery has lost momentum mainly due to a deepening property slump and weak consumer spending.

China, the world’s second-largest economy and top crude importer, has announced a string of stimulus measures, including halving the stamp duty on stock transactions and easing mortgage rates.

Opec raised its forecast for 2023 non-Opec supply growth to 1.7 million bpd from 1.6 million bpd and said the increase would be mostly driven by the US, Brazil, Norway, Kazakhstan, Guyana and China.

For 2024, non-Opec crude supply is expected to expand by 1.4 million bpd, unchanged from the previous month.

Opec’s crude oil production in September rose by 273,000 bpd to 27.75 million bpd, the group said, citing secondary sources.

On October 4, the Opec+ group of crude oil-producing states decided to stick to its current output policy.

Opec+ members Saudi Arabia and Russia have reaffirmed their collective supply cut of 1.3 million bpd to the end of the year.

The group has enforced total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand.

This includes a reduction of 2 million bpd agreed on last year, and voluntary cuts of 1.66 million bpd, announced in April and extended to December 2024.

Meanwhile, the International Energy Agency has slashed its oil demand growth forecast for next year, citing a “deteriorating economic climate”, which will weigh on crude consumption.

Global oil demand is now expected to expand by nearly 900,000 bpd next year, down from the agency’s previous forecast of a growth of 1 million bpd, the IEA said in its monthly oil market report on Thursday.

Earlier this week, the International Monetary Fund kept its global economic expansion forecast for 2023 at 3 per cent, below the 3.5 per cent expansion recorded last year, retaining the historical growth average of 3.8 per cent.

The fund estimates growth to hit 2.9 per cent next year, a 0.1 percentage point downgrade from the IMF forecast in July.

Updated: October 12, 2023, 12:23 PM