OPEC lowered its global oil demand expectations for the next two years on Monday, just as the organization and its allies prepare to decide on whether to restore supply in the next quarter. According to OPEC's latest monthly report, the organization lowered its prediction of global oil demand growth in 2024 by 0.135 million barrels per day. This is the first significant change in the forecast this year, but it is still far above other forecasts in the oil industry. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

According to the latest monthly report from OPEC, the organization has lowered its expectations for global oil demand growth in 2024 by 0.135 million barrels per day. This is the first significant change in the forecast this year, but it is still far above other forecasts in the oil industry.

The OPEC-led alliance must decide in the coming weeks whether to proceed with its plan to gradually increase supplies starting in October. At a review meeting earlier this month, the alliance reiterated that it could “pause or reverse” the production increase plan based on current market conditions.

Oil prices have been fluctuating in recent weeks, with Brent crude futures prices close to $80 per barrel, but for many OPEC+ member countries, this price is still too low to cover government spending. This is due to concerns about escalating geopolitical tensions in the Middle East and signs of weakening economic growth in the world's largest oil-consuming countries.

The Vienna-based secretariat of OPEC said that “this slight revision reflects first and second-quarter ‘actuals’ and an anticipated weakening of Asia’s oil demand growth in 2024.”

Despite the reduced expectations for demand growth, the organization still believes that global oil consumption will grow at a ‘healthy’ pace of 2.1 million barrels per day this year, averaging 0.1043 billion barrels per day.

Its forecast is still higher than typical pre-pandemic growth levels and exceeds the expectations of many major trading companies and Wall Street banks. OPEC's estimate is more than twice that of the International Energy Agency (IEA), and is at the high end of the range expected by Saudi Aramco, the oil giant.

OPEC+ has been restricting output for the past two years to counter supply surpluses threatened by the increased supply led by the Americas, including the US, Brazil and Guyana.

The alliance has provisionally planned to restore about 0.543 million barrels per day of production in the fourth quarter, which is the first step in increasing daily production by 2.2 million barrels by the end of 2025.

According to OPEC's data, the alliance can restore oil supply from October without disrupting market stability.

The report estimates that 23 OPEC+ member countries will need to produce an average of 43.8 million barrels of oil per day by the end of the year, an increase of 1.4 million barrels from the second quarter.

However, OPEC sometimes formulates policies that are inconsistent with its predictions, and these forecasts are sometimes proved inaccurate. At the end of last year, the organization announced an increase in production cuts, while its data showed record inventory tightening, but this situation never materialized.

Editor/ping