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(OPEC) expects global oil demand to grow strongly in 2025

18-01-2024

The Organization of Petroleum Exporting Countries (OPEC) expected on Wednesday that global demand for oil in 2025 will witness strong growth of 1.8 million barrels per day on an annual basis. OPEC stated in its monthly report that demand for oil in OECD countries is expected to grow by 100,000 barrels per day on an annual basis and in non-member countries by 1.7 million barrels per day. Global oil demand growth expectations for the year 2024 remain unchanged at 2.2 million barrels per day, with demand growing in OECD countries by about 300,000 barrels per day and non-member countries by about 2.0 million barrels per day. The report indicated that non-OPEC oil production is expected to grow in 2024 by 1.3 million barrels per day, which is a slight downward revision from the previous month’s assessment. According to the report, the United States, Canada, Guyana, Brazil, Norway, and Kazakhstan will be the main drivers of crude supply growth in 2024. The report also suggested that the growth of non-OPEC oil supplies in 2025 would reach 1.3 million barrels per day, driven mainly by the production of the United States, Brazil, Canada, Norway, Kazakhstan and Guyana. The production of crude oil by the 12 OPEC countries increased in December 2023 by 73 thousand barrels per day on a monthly basis, reaching an average of 26.70 million barrels per day, according to available secondary sources. Regarding prices, the report stated that the value of the OPEC reference basket declined by $5.92, or 7.0 percent, in December, reaching an average of $79 per barrel. The market structure continued to be weak across all markets as hedge funds and other money managers remained in a bearish trend, leading to a significant decline in their long-term positions and contributing to price volatility. Regarding global economic growth expectations for the year 2024, OPEC expected it to reach 2.6 percent, unchanged from the previous month’s assessment, and that economic growth in 2025 will recover slightly to reach 2.8 percent. This positive path is consistent with expectations of a decline in general inflation throughout 2024 and until 2025, especially in major economies. A shift towards increasingly accommodative monetary policies is expected during the second half of 2024 and throughout 2025, with key interest rates expected to reach their peak in the first half of 2024. Regarding economic growth expectations in a number of countries, the report suggested that the pace of growth in the United States would continue unchanged in 2024 at 1 percent and then 1.5 percent in 2025. In the euro area, growth expectations will remain at 0.5 percent in 2024 before rising to 1.2 percent in 2025. In China, economic growth expectations for 2024 will remain at 4.8 percent, but will decline to 4.6 percent in 2025. Russia's economic growth forecast in 2024 was revised to 1.4 percent and to 1.2 percent in 2025. The monthly report stated that demand for OPEC crude will reach 28.5 million barrels per day in 2024, which is 0.8 million barrels per day higher than the level estimated in 2023. Based on the initial global demand for oil and non-OPEC supply expectations for the year 2025, demand for OPEC crude is expected to rise to reach 29.0 million barrels per day, which is 500 thousand barrels per day higher than the level expected for the year 2024.