Financial Associated Press, September 25th (Editor: Niu Zhanlin) On local time Tuesday, OPEC released the 2024 Global Oil Outlook Report, raising its forecast for global medium to long-term oil demand. The reasons are that economic growth in India, Africa, and the Middle East will drive demand, and the shift from traditional fuels to electric vehicles and clean energy is not as fast as expected.

OPEC believes that the time for oil demand growth will be longer than other forecast institutions such as BP and the International Energy Agency (IEA), which predict that global oil demand will peak before 2030.

BP forecasts that oil demand will peak in 2025 and drop to 75 million barrels per day by 2050. ExxonMobil expects oil demand to remain above 0.1 billion barrels per day by 2050, similar to current levels.

As for global clean energy transition plans, OPEC believes that some countries and companies may resist overly ambitious clean energy goals. In addition, some global auto manufacturers have adjusted their electrification goals, reducing investment in electric vehicles. This may also mean that the demand for oil will not decrease as rapidly as previously predicted.

OPEC Secretary General Haitham Al Ghais wrote that the peak oil demand will not appear in the foreseeable future. "Over the past year, people have increasingly realized that the world can only gradually introduce new energy on a large scale when they are truly prepared."

OPEC expects global oil demand to reach 0.1189 billion barrels per day by 2045, about 2.9 million barrels per day higher than last year's expectations. OPEC also extends the outlook for oil demand to 2050, estimating that demand will reach 0.1201 billion barrels per day by then.

OPEC has been calling for increased investment in the oil industry and believes that by 2050, the total investment in the oil industry will need $17.4 trillion, while the estimate for 2023 is to reach $14 trillion by 2045.

Short-term oil price

As inflation pressures ease, major central banks globally have begun an interest rate cut cycle, leading to an improved economic outlook. Therefore, OPEC has raised its mid-term demand forecasts.

Specifically, OPEC expects global oil demand to reach 0.111 billion barrels per day in 2028, and 0.1123 billion barrels per day in 2029. Compared to last year's forecast, the data for 2028 has increased by 0.8 million barrels per day.

In 2020, when the COVID-19 pandemic hit oil demand, OPEC made adjustments, stating that consumption would stabilize by the end of the 2030s. With the recovery in oil consumption, the institution has begun to revise its forecasts upwards once again.

OPEC predicts that by 2050, there will be 2.9 billion cars on the road, an increase of 1.2 billion from 2023. The report states that despite the rapid growth in electric vehicles, by 2050, internal combustion engine-driven cars will still account for over 70% of the global car total. "Electric vehicles are expected to capture a larger market share, but there are still obstacles such as the power grid, battery manufacturing capacity, and access to key minerals."

While OPEC is bullish on the oil market outlook, current oil prices are still low, which is great news for consumers but a nightmare for OPEC member countries.

Earlier this month, the OPEC+ led by Saudi Arabia decided to further delay oil production increases by two months to support oil prices, but so far it has had almost no effect. Depressed global demand, coupled with new oil supplies from non-OPEC countries, means that oil prices will remain under long-term pressure.

Analysts from the Middle East Institute stated that the biggest threat to rising OPEC oil prices comes from external factors, primarily some countries experiencing low demand and a significant increase in oil supply from non-OPEC+ countries. With increased supplies from the U.S., Guyana, and Brazil, non-OPEC+ countries' oil daily production will increase by 1.5 million barrels next year.