September 22, 2023

OPEC will doubtless keep an upbeat view on oil demand development for subsequent yr when it publishes its first outlook later this month, predicting a slowdown from this yr however nonetheless an above common improve, sources near OPEC mentioned.

OPEC’s forecast for 2024 will doubtless be decrease than the expansion it expects to this yr of two.35 million barrels per day, or 2.4%, an abnormally excessive fee because the world moved out of the coronavirus pandemic.

Even so, it will nonetheless be properly above the annual common of the previous decade except for the pandemic years and above predictions by the Worldwide Power Company which sees a significant slowdown in demand development subsequent yr to 860,000 bpd.

OPEC and the IEA have repeatedly clashed in recent times with OPEC criticising the IEA, which advises industrialised nations, for what it sees as irresponsible predictions and subsequent knowledge revisions.

Oil demand development is a sign of doubtless oil market energy and kinds a part of the backdrop for coverage selections by OPEC and its allies, often called OPEC+. The group in June prolonged provide curbs into 2024 to help the market as concern of weakening demand pressured costs.

For 2024, three OPEC sources mentioned that whereas demand development was prone to present a slowdown it will not be as extreme because the IEA predicts and development will doubtless be above 1 million bpd and certain beneath 2 million bpd.

“It may be anticipated that the rise in oil demand in 2024 might be a lot decrease than 2023,” one of many OPEC sources mentioned, including that it may very well be between 1.5 to 1.7 million bpd.

OPEC is anticipated to publish its first demand forecast for 2023 in its month-to-month report on July 13.

“It will likely be extra bullish than the IEA,” one other supply mentioned of OPEC’s 2024 demand view.

Prime officers from OPEC nations at a convention this week resembling Amin Nasser, chief govt of state-owned oil producer Saudi Aramco, expressed optimism over the oil demand outlook regardless of financial headwinds weighing on costs.

“Asia is rising. China alone between 2019 and 2023, 3 million bpd development, India 1 million bpd development, so there’s a pickup in demand,” he mentioned.

Oil demand forecasters usually need to make sizeable revisions given modifications within the financial outlook and geopolitical uncertainties, which this yr included China’s lifting of coronavirus lockdowns and rising rates of interest.

OPEC initially forecast demand development in 2023 of two.7 million bpd in its first forecast revealed in July 2022, later revising it all the way down to 2.35 million bpd.

(Extra reporting by Ahmad Ghaddar, modifying by David Evans)