OPEC cuts oil demand forecast for fifth consecutive month

OPEC announced its largest reduction yet in global oil demand growth projections for 2024 on December 11, marking the fifth consecutive downgrade in its monthly reports.

The Organization of the Petroleum Exporting Countries cited weakening demand from China, alongside India and other regions, as key factors driving the adjustment, Caliber.Az reports via foreign media.

In its latest report, OPEC revised its 2024 oil demand growth forecast to 1.61 million barrels per day (bpd), down from 1.82 million bpd projected in November. This represents a sharp drop from the 2.25 million bpd forecast in July and highlights a growing divergence between expectations and reality for the world's energy markets. The organization also lowered its 2025 growth projection to 1.45 million bpd from 1.54 million bpd.

"The bulk of this revision is made in the third quarter, taking into account recently received bearish data," OPEC noted in the report.

OPEC highlighted China’s slowing growth as a pivotal factor in its revised outlook. Once the dominant engine of global oil demand growth, China now faces declining transport fuel needs. The report estimates Chinese oil demand will grow by 430,000 bpd in 2024—far below the 760,000 bpd forecast in July. Other regions, including India, the Middle East, and Africa, also contributed to the downward adjustment.

This shift reflects broader economic challenges, as well as China’s potential move towards peaking crude oil imports as early as next year.

Following the report's release, Brent crude prices slipped below $73 a barrel. OPEC's revised figures bring its outlook closer to that of the International Energy Agency (IEA), which projects far weaker growth at 920,000 bpd in 2024.

While OPEC’s forecasts remain higher than most industry estimates, the alignment with IEA signals a recognition of global economic and energy transitions. The IEA is expected to update its projections on Thursday.

The updated outlook presents challenges for OPEC+—a coalition including OPEC members and allies like Russia—which has sought to stabilize the market through production cuts. Since late 2022, the group has implemented several output reductions, including a recent delay in unwinding cuts totaling 2.2 million bpd until April 2025.