Global Oil Demand Forecast for 2024
Rising Oil Demand Predictions
The prediction for global oil demand in 2024 stands at a growth of 1.9 million barrels per day (bpd) according to energy research firm Wood Mackenzie. This estimate aligns closely with OPEC’s forecast for the same year. The bulk of this increase is anticipated to stem from the robust demand in China and India.
Differing Views on Oil Demand Growth
Forecasts regarding oil demand growth in 2024 vary significantly, reflecting divergent opinions on the pace of transitioning away from fossil fuels. While OPEC foresees ongoing growth in oil consumption over the next two decades, the International Energy Agency (IEA) anticipates a peak by 2030. OPEC projects a strong demand growth of 2.25 million bpd, contrasting with the IEA’s more conservative estimate of 1.22 million bpd. Analysts surveyed by Reuters expect a growth rate ranging from 1 million to 1.5 million bpd in 2024.
Output Cut Dynamics
OPEC+ has been implementing output cuts since late 2022 to stabilize the market amidst increased production from non-member countries like the U.S. In November, OPEC+ agreed to voluntary cuts of approximately 2.2 million bpd for the first quarter of the year. Discussions are underway to potentially extend these cuts into the second quarter and beyond, as market balancing remains a priority.
Market Influences and Price Trends
Geopolitical tensions and disruptions, such as attacks on Red Sea shipping by groups like the Iran-aligned Houthi, have provided support to oil prices in recent times. However, concerns surrounding economic growth and interest rate hikes in Western economies have exerted downward pressure. Oil prices hovered above $83 a barrel as of the latest trading session.
Oil demand predictions for 2025 show a slight decrease according to Wood Mackenzie, contrasting with OPEC’s expectations for continued growth. The IEA is set to unveil its 2025 forecast in the coming months. Despite challenges, market players remain vigilant in navigating the complex dynamics of supply and demand in the oil sector.