Opec has stuck to its oil demand growth forecast for 2023 and 2024 and expects “resilient” gross domestic product growth globally to support crude demand next year.
Global oil demand growth forecast for this year was unchanged from last month’s estimate at 2.5 million barrels per day, the group said in its monthly oil market report on Wednesday.
In 2024, oil demand is expected to grow by 2.2 million bpd, supported by improving economic activity in China.
“Continuous improvements in economic activity, steady manufacturing and transportation activity mostly in China, other Asia and the Middle East, as well as in India and Latin America, are expected to account for the bulk of oil consumption,” Opec said.
The group raised its forecast for world economic growth to 2.9 per cent for 2023, but left its growth estimate for the coming year unchanged at 2.6 per cent.
Opec’s crude production in November dropped by 57,000 bpd, compared with the previous month, to 27.84 million bpd.
On November 30, the Opec+ alliance announced voluntary production cuts of 2.2 million bpd for the first quarter of 2024.
Saudi Arabia, the world's largest oil exporter, will keep its voluntary output cut of one million bpd until the end of March.
Russia is expected to deepen its voluntary oil production cut to 500,000 bpd and extend it until the end of the first quarter of 2024.
The cuts came in response to a fall in oil prices.
Brent crude, which briefly touched $98 in September, has since lost nearly a fifth of its value despite predictions of a tight crude market in the fourth quarter by the International Energy Agency and Opec.
China’s growth trajectory, supported by further government-led stimulus measures, could support global economic growth in the short term, Opec said.
The country has announced a string of measures over the past few months as weak consumption and a property sector slump hinder growth in the world’s second-largest economy.
Meanwhile, “sustained” momentum in the US in the fourth quarter and throughout 2024 could lead to economic growth surpassing initial expectations, the oil producers group added.
In October, the International Monetary Fund kept its global economic growth projection for this year at 3 per cent, slower than the 3.5 per cent expansion recorded in 2022, remaining below the historical growth average.
For 2024, the fund expects global GDP to expand by 2.9 per cent, a 0.1 percentage point downgrade from the forecast made by the fund in July for the same period.
