The Organization of the Petroleum Exporting Countries lowered its forecast of growth in the global oil demand both for 2024 and for 2025 for the third month running.
OPEC’s September Oil Market Report stated that the reduction in forecasts is due to lower oil demand in certain regions around the world.
The growth in oil demand for 2024 was revised downwards due to the adjustments made by countries of the Organization for Economic Cooperation and Development in April-June.
OPEC stated in its report:
Some adjustments have been made in the non-OECD region, reflecting both actual data and slightly lower expectations of performance for some regions.
OPEC’s oil production fell in September, compared to the previous month. Also, the total production of OPEC and allies has decreased over the past month.
OPEC reduces demand forecasts
On Monday, the cartel cut its projection for global oil demand growth in 2024 by 106,000 barges per day. The cartel now expects the global oil demand to rise by 1.9 millions barrels per day in this year.
The adjustment is based on actual data and slightly lower expectations in some regions.
OECD oil consumption is expected to increase by only 100,000 barrels per a day by 2024 compared to last year.
This year, the majority of growth will occur in non-OECD nations such as China and India. Non-OECD oil consumption is expected to rise by 1.8 millions barrels per day in 2018.
The growth in oil demand has been reduced by 102,000 barrels a day for 2025. OPEC has said that oil demand will grow by 1.6 million barrels a day next year.
The cartel has said:
The growth of the non-OECD oil market is expected to be driven by China, Other Asia and India, with an increase in demand of about 1.5 mb/d y-o y.
Non-OPEC Supply Growth
The cartel maintained its forecasts for the growth of oil supplies from sources outside OPEC+ for 2024-2025.
The non-OPEC oil production is expected to grow by 1.2 millions barrels per a day in 2024 to an average of 53.1 million barrels a day. The US, Canada Brazil and China are predicted to be the main growth drivers.
The cartel has said that oil supplies from outside the OPEC+ group are expected to rise by 1.1 millions barrels per day next year. The US, Brazil Canada and Norway are expected to drive the growth.
The total supply of oil from non-OPEC nations is expected to reach 54.2 million barrels a day next year.
OPEC crude production drops in September
In September, the crude oil production of the 12 permanent members in OPEC decreased by 604,000 barrels a day compared to the previous month.
Iraq’s oil production dropped by 155,000 barrels a day, to 4,11 million barrels a day in the last month. As a result of compensating for the overproduction in earlier years, Iraq’s oil production has fallen.
Since the beginning of 2014, eight members of OPEC+ including Iraq have reduced oil production voluntarily.
Saudi Arabia, de facto leader, had last month urged its members to adhere to the production quotas.
Secondary data in the report revealed that the Kingdom’s oil output fell by 23,000 barrels a day to 8,97 million barrels a day.
Libya’s oil production fell the most among the other countries, from 410,000 barrels a day in August to 540,000 last month.
OPEC’s and its allies’ production dropped from 557,000 barrels a day to 40,10 million barrels a day in September.
Kazakhstan was under pressure to meet production quotas. It produced 75,000 barrels more per day last month. This brought its output up to 1.55million barrels.
Oil prices drop as OPEC reduces demand forecasts
On Monday, oil prices fell more than 2% as OPEC lowered its forecast for global demand growth.
Prices have been on the decline since early in the session, as fears of deflation and low demand from China have weighed heavily on sentiment.
Brent crude oil is currently trading at $77.42 a barrel, down by 2.1% since the previous close.
This post OPEC lowers its oil demand growth forecasts for 2024 and 25; September oil production declines may change as new information unfolds.
