OPEC’s positive stance on oil demand in 2024 remains unwavering, as stated by anonymous sources within the organization, and is set to be disclosed in their upcoming publication on July 13, as reported by Reuters. The projected outlook for 2024 suggests that OPEC will maintain an optimistic perspective, surpassing the average but falling short of this year’s robust oil demand expansion.
According to OPEC’s June report, the anticipated growth in oil demand for 2023 is expected to reach 2.35 million barrels per day (bpd), signifying a 2.4% rise compared to 2022. This considerable growth rate comes on the heels of a couple of lackluster years precipitated by the far-reaching impact of the coronavirus pandemic. Notably, this figure represents a slight increase from the May report, which projected a demand growth of 2.33 million bpd.
Although the forecasted oil demand growth for 2024 is anticipated to be lower than the projected 2.35 million bpd for this year, OPEC is still expected to unveil an above-average growth estimate for the upcoming year. In contrast, the International Energy Agency (IEA) projects a more modest growth of a mere 0.86 million bpd.
Insiders from OPEC, who preferred to remain unidentified, indicate that the slowdown in oil demand growth next year will not be as severe as forecasted by the IEA, with the growth expected to exceed 1 million bpd. Moreover, an additional source with close ties to OPEC disclosed to Reuters that the expected demand growth would likely surpass 1.5 million bpd.
OPEC’s optimistic outlook for oil demand in 2024 aligns with the recent decision by Saudi Arabia, a key player within the organization, to raise crude oil prices in the Asian market. This move follows comments made earlier in the week by Amin Nasser, CEO of Aramco, highlighting the substantial growth in oil demand from China and India alone, which amounted to 4 million barrels per day between 2019 and 2023.
Nevertheless, OPEC’s most recent monthly report cautions readers about the mounting uncertainties surrounding economic growth in the latter half of this year, attributable to inflation, rising interest rates, and tight labor markets. Furthermore, the report emphasizes the potential impact of geopolitical conflicts in Eastern Europe, which adds an additional layer of uncertainty to the already complex landscape of oil demand growth forecasts.
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