OPEC trims global oil demand forecasts as prices tumble

OPEC has again cut its forecasts for global oil demand as well as the call on OPEC+ crude, as sluggish economic growth and rising rival crude production continue to weigh on prices.

Global oil demand will grow by 2 million b/d in 2024, OPEC said in its closely watched monthly oil market report Sept. 10, which is 80,000 b/d less than the organization had forecast in August. For 2025, demand will rise a further 1.7 million b/d, OPEC said, making a 40,000 b/d downward revision.

The report comes a day after Dated Brent hit a 17-month low of $72.13/b, according to assessments by Platts, part of S&P Global Commodity Insights, and five days after OPEC and its allies postponed until December a planned 180,000 b/d production increase for October.

The so-called “call on OPEC+ crude” -- the volume the alliance must produce to balance the market -- was slashed by 100,000 b/d to 42.8 million b/d in 2024 and by 200,000 b/d to 43.4 million b/d in 2025, compared with the previous month.

That remains well above the 40.66 million b/d that the group pumped in August, according to secondary sources used by the secretariat to monitor member output, including the Platts OPEC+ survey by Commodity Insights.

The August production figure was a decline of 304,000 b/d from July, led by steep falls in political crisis-hit Libya and maintenance-addled Kazakhstan.

OPEC has lowered its call on OPEC+ crude for 2024 by 360,000 b/d over the past five months and for 2025 by 530,000 b/d in the same span.

Still, despite the weaker demand growth estimates, OPEC said in its report that it sees reason for optimism.

“Although some downside risks exist, the momentum in non-OECD economies observed since early 2024, coupled with a rebound in OECD countries, could provide additional upside for global economic growth and carry over into 2025,” it said.

OPEC maintained its forecast for supply growth outside OPEC+, which has been a key factor in falling prices in 2024.

It sees non-OPEC+ supply growth at 1.2 million b/d in 2024 to average 53.1 million b/d, and 1.1 million b/d in 2025 to average 54.2 million b/d.

The bulk of this growth will come from the US, which is expected to produce 510,000 b/d more liquids in 2024 and add another 500,000 b/d in 2025.

Having postponed their production increase for two months, OPEC+ ministers will review market conditions again on Oct. 2, when the Joint Ministerial Monitoring Committee convenes. The JMMC is also tasked with overseeing member compliance with quotas.

Slack compliance has been a major bone of contention within the alliance, with Iraq and Kazakhstan coming under notable pressure to stop overproducing.

The OPEC report indicated Iraq pumped 4.228 million b/d of crude in August, according to secondary sources, well above its quota of 4 million b/d, not including “compensation cuts” Baghdad has pledged to make for previous overproduction. That is down 50,000 b/d month on month, as state marketer SOMO has said it has canceled some crude loadings to improve compliance with its production quota.

Kazakhstan, meanwhile, produced 1.450 million b/d in the month, right at its quota and down from 1.565 million b/d in July, having implemented maintenance on its key Tengiz field.

Russia, which has also pledged compensation cuts, pumped 9.059 million b/d in August, according to secondary sources, above its quota of 8.978 million b/d.

OPEC estimated total OECD commercial oil and product stocks at 2.815 billion barrels in July, down 11.7 million barrels on the month. This included a drop of 5.1 million barrels of crude and 6.6 million barrels of product stocks.