OPEC forecasts global oil demand to grow by 2.3 million bpd in second half of 2024

OPEC kept forecast unchanged for the overall oil demand for 2024 at 2.2 million bpd.

Organisation of Petroleum Exporting Countries (OPEC) forecast world oil demand to grow by an average of 2.3 million barrels per day (bpd) in the second half of 2024.

The group, in its monthly oil report, said that the services sector is projected to be the main contributor to the economic growth in the second half of the year, particularly supported by travel and tourism.

The oil cartel said in the non-OECD, China is expected to be the primary oil demand driver, with other countries in the region providing support. The oil demand from non-OECD is forecast to grow on average by 2.1 million bpd year-on-year in the second half. In the OECD, oil demand is estimated to increase by 0.25 million bpd y-o-y, in the same period driven mostly by the US, said OPEC.

“The ongoing air travel recovery, healthy driving levels, as well as improvements in manufacturing sector activities are projected to support jet/kerosene, gasoline, and distillate demand in the region,” said OPEC in the report.

OPEC kept forecast unchanged for the overall oil demand for 2024 at 2.2 million bpd.

OPEC+ supply cuts

In a recent decision, OPEC and its allies (known as OPEC+) decided to continue the voluntary cuts of 2.2 million barrels per day (bpd) till September 2024. Thereafter, the group plans to phase out the supply cuts over a year, i.e. till September 2025, in a monthly fashion.

OPEC added that the monthly increase in production after September 2024 could be paused or reversed based on the market conditions.

OPEC and its allies have currently put in place a total production cut of around 6 million barrels per day (bpd). Of this, a production cut of 3.66 million bpd is to be implemented till the end of 2024 while the voluntary cuts of 2.2 million bpd expired in June and have been extended till September 2024.