OPEC Slashes 2024 Oil Demand Forecast Amid Global Shifts

OPEC has cut its 2024 forecast for global oil demand growth, marking the fourth consecutive downward revision. The decline is mainly attributed to China and India. The organization has also lowered its demand growth estimates for 2025, indicating challenges for OPEC+ amidst market volatility and shifts to cleaner fuels.

In a significant development, OPEC announced a downward revision of its forecast for global oil demand growth for 2024. This marks the fourth consecutive cut, heavily pointing to China and India as primary factors for the adjustment. The announcement underlines the challenges OPEC+ faces, especially in light of recent postponed plans to raise production.

According to OPEC's latest monthly report, the expected increase in global oil demand for 2024 is now pegged at 1.82 million barrels per day, down from 1.93 million bpd projected just last month. This revision reflects trends that have persisted since July 2023 and was initially kept unchanged until now.

Specifically, China's influence on this downgrade is notable, with OPEC lowering its forecast for Chinese growth from 580,000 bpd to 450,000 bpd. This shift is attributed to a slowdown in construction, weakened manufacturing activity, and the increasing use of LNG-fuelled trucks. As Brent crude prices fell below $73 a barrel, the differing global perspectives on China's impact and the transition to cleaner energy sources highlight the complexities facing the oil industry moving forward.

(With inputs from agencies.)