By Alex Lawler
LONDON (Multibagger) - OPEC on Monday cut its forecast for global oil demand growth in 2024, citing weaker than expected data for the first half of the year and softer expectations for China, and also trimmed its expectation for next year.
The Organization of the Petroleum Exporting Countries in a monthly report said world oil demand will rise by 2.11 million barrels per day (bpd) in 2024, down from growth of 2.25 million bpd expected last month.
"This slight revision reflects actual data received for the first quarter of 2024 and in some cases for the second quarter, as well as softening expectations for China's oil demand growth in 2024," OPEC said in the report.
"Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility."
There is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over China and more broadly over the pace of the world's transition to cleaner fuels. The reduction still leaves OPEC at the top end of industry estimates.
In the report, OPEC also cut next year's demand growth estimate to 1.78 million bpd from 1.85 million bpd previously expected.
Analysis:
The latest report from OPEC has highlighted a shift in the forecast for global oil demand growth in 2024, with a downward revision from the previous month. This adjustment is primarily driven by weaker data in the first half of the year and softer expectations for China's oil demand growth.
Despite these challenges, OPEC remains optimistic about the overall demand for oil, citing solid transport fuel demand due to healthy road and air mobility. However, there is a divergence in opinions among forecasters regarding the strength of oil demand growth, reflecting uncertainties around China and the global transition to cleaner fuels.
For investors and individuals following the energy market, these revisions from OPEC could have implications for their investment decisions and financial planning. It is essential to monitor updates from OPEC and other industry reports to stay informed about the evolving landscape of global oil demand and its potential impact on the market.