OPEC Maintains Forecast for Strong Global Oil Demand Growth in 2024-2025

OPEC and global energy consultancies predict that oil will continue to play a vital role in the future, despite anticipated changes in the energy landscape. OPEC has maintained its forecast for relatively strong growth in global oil demand in 2024 and 2025, with a predicted rise of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025.

The organization also expects a boost in global jet kerosene fuel demand, gasoline, and diesel during the summer months due to increased travel. OPEC believes that the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024, despite some downside risks.

The OPEC alliance has implemented a series of output cuts since late 2022 to support the market, aiming to push oil prices to $100 per barrel. The cuts have so far achieved the desired effect on prices, but cannot continue indefinitely. OPEC+ may need to unwind them at some point, potentially when Brent crude tops $100 per barrel. The group will meet in June to decide whether to extend the cuts further or return some supply to the market.

Why this matters: The predictions by OPEC and global energy consultancies have significant implications for the global economy and the future of the energy industry. The continued reliance on oil, despite the ongoing transition towards cleaner energy sources, highlights the complex challenges in balancing energy security, economic growth, and environmental sustainability.

A new report by Enverus Intelligence Research forecasts that global oil demand may grow to approximately 108 million barrels per day by 2030, suggesting that oil will continue to play an essential role in the future energy landscape. The report also indicates that OPEC's influence on oil prices is likely to strengthen, supporting the cartel's preference for Brent prices between $85 and $105 per barrel. "OPEC expects oil demand to grow by 2.2 million barrels per day in 2023, potentially leading to a supply deficit," the report states.

Key Takeaways

• OPEC forecasts robust growth in global oil demand in 2024-2025, up to 2.25 million bpd.
• OPEC expects increased summer demand for jet fuel, gasoline, and diesel due to travel surge.
• OPEC has implemented output cuts to support oil prices, aiming for $100/barrel Brent crude.
• Enverus forecasts global oil demand may reach 108 million bpd by 2030, sustaining OPEC's influence.
• OPEC expects a 2.2 million bpd increase in oil demand in 2023, potentially leading to a supply deficit.