OPEC on Oct. 14 trimmed its world oil demand forecast for 2024 and 2025 for the third successive month, thought it maintained that its estimates still reflected healthy, above-average growth.
In its latest Monthly Oil Market Report, the producer group said global oil demand would grow by 100,000 b/d less than it had forecast in September, at 1.93 million b/d for 2024 and 1.64 million b/d for 2025.
The downward revisions were prompted by lower-than-expected consumption in some regions, OPEC said, but it noted that the demand growth figures were “well-above the historical average of 1.4 million b/d seen before the COVID-19 pandemic.”
The so-called “call” on OPEC+ crude — the volume the group and its allies would need to produce to balance supply with demand — was pegged at 42.8 million b/d for 2024 and 43.2 million b/d for 2025, still far above the alliance’s output of 40.10 million b/d in September, according to secondary sources, particularly after it fell 530,000 b/d month-on-month on Libya and Iraq reductions.
That should provide the OPEC+ bloc some room to increase production over the coming months, as it plans to do from December.
But the outlook is far more bullish than many other forecasters, such as the rival International Energy Agency, which is due to issue its latest market report Oct. 15. Its September estimate of global demand growth was 900,000 b/d for 2024.
Still, the OPEC revisions have been significant and a sign that the organization has acknowledged potential rocky times ahead, as escalating tensions in the Middle East have failed to outweigh market expectations of weak fundamentals heading into 2025, preventing a breakout in oil prices.
Since July, OPEC has dropped its 2025 global demand estimate by 530,000 b/d and its 2024 figure by 320,000 b/d, while its demand growth forecast has also taken a hit, despite keeping non-OPEC production growth stable.
Significant volatility
OPEC+ has been battling to shore up the oil market in recent months amid significant volatility, exacerbated by wars in the Middle East and Europe.
The military escalation between Israel and Iran and its proxies in the Middle East, which poses a risk to oil infrastructure and shipping — and therefore production and exports — as well as 5.8 million b/d of overlapping OPEC+ production cuts have put a floor on oil prices.
However, high output in non-OPEC+ producers in the Americas, such as the US, Canada and Brazil, as well as weak Chinese oil demand, stubbornly high interest rates around the world, and quota busting by the likes of Iraq, Kazakhstan and the UAE, have put downward pressure on prices, fueling tensions over compliance within the group. Global refinery intake also fell by 1.4 million b/d month on month in September, OPEC said in a feature article, due to maintenance and hurricane activity.
According to the October report, non-OPEC+ crude supply is set to rise by 1.23 million b/d in 2024 and 1.11 million b/d in 2025, the latter up just 10,000 b/d from September’s estimate.
Platts, part of S&P Global Commodity Insights, last assessed Dated Brent at $80.15/b on Oct. 11, having rallied somewhat since almost falling below $70/b on Sept. 10. Yet the benchmark remains significantly below the 2024 peak of $93.35/b in mid-April, as well as many OPEC+ members’ fiscal breakeven oil prices.
Price weakness led the alliance’s eight voluntary cutters — Saudi Arabia, Kuwait, Algeria, Oman, Kazakhstan, Iraq, Russia and the UAE — to delay plans to gradually taper 2.2 million b/d of cuts by two months in October.
The group now plans to start with some 180,000 b/d of additional production in December, subject to market conditions.
Finally, the OPEC report estimated that OECD crude stocks fell by 6.5 million barrels from July to August, putting them 128.1 million barrels below the 2015-19 average at 1.319 billion barrels.
OPEC+ sources have grumbled that global oil inventories would be lower, the market tighter, and prices stronger, had the group’s members complied fully with their quotas up to now, leading to additional pressure on over-producers.
The group is next due to meet in person in Vienna on Dec. 1 for a full ministerial meeting.
Source: Platts
