The Organization of the Petroleum Exporting Countries (OPEC) has stuck to its prediction of robust global oil demand growth for 2024 and 2025. OPEC attributes this strong outlook to a resilient global economy and a surge in travel activity, particularly during the summer months.
OPEC’s monthly report predicts a 2.25 million barrels per day (bpd) increase in oil demand in 2024 and a further 1.85 million bpd rise in 2025. These figures remain unchanged from last month’s report. The organization anticipates that the summer travel season in the Northern Hemisphere, particularly in the US, will drive up demand for transportation fuels, significantly impacting overall growth.
In addition to the strong travel outlook, OPEC has also raised its global economic growth forecast for this year to 2.9% from 2.8%, citing positive momentum in economies outside of developed nations. This upward revision further supports OPEC’s optimistic view of oil demand.
To support the market, the OPEC+ group, which includes OPEC members and allies like Russia, has implemented several output cuts since late 2022. They recently agreed to extend the current cut of 2.2 million bpd until September, with a gradual phase-out starting in October.
Despite OPEC’s optimistic forecast, some other forecasters, like BP, predict a peak in oil demand as early as next year due to concerns about the energy transition towards cleaner fuels. However, OPEC’s latest report suggests that oil demand will likely remain strong in the near term, fueled by continued economic growth and robust travel activity.