OPEC sees robust summer oil demand, economic upside potential
The Organization of the Petroleum Exporting Countries predicted robust fuel use in the summer months on Thursday and stuck to its forecast for relatively strong growth in global oil demand in 2024, highlighting an unusually large gap between predictions of oil demand strength. OPEC, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.
GROWTH POTENTIAL
Both forecasts were unchanged from last month. A boost to economic growth could give extra tailwind to oil prices, which have rallied above $90 a barrel this year on tighter supply and war in the Middle East. OPEC and its allies, known as OPEC+, last week agreed to keep oil output cuts in place until the end of June. “Despite some downside risks, the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024,” OPEC said in the report.
Looking ahead to the summer, when fuel demand rises seasonally as people travel more, OPEC said global jet/ kerosene fuel demand will rise by 600,000 bpd year on year in the second quarter, gasoline by 400,000 bpd and diesel by 200,000 bpd. “The robust oil demand outlook for the summer months warrants careful market monitoring, amid ongoing uncertainties, to ensure a sound and sustainable market balance,” the report said.
However, there is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over the pace of the world’s transition to cleaner fuels.