OPEC Predicts Strong Summer Fuel Use and Global Oil Demand Growth
In a bold move, the Organization of the Petroleum Exporting Countries (OPEC) declared on Thursday its anticipation of robust fuel consumption during the upcoming summer months. Additionally, OPEC maintained its projection for a relatively strong surge in global oil demand by 2024, hinting that the world economy could potentially exceed expectations for the current year. This information was reported by Reuters.
Steady Growth in Oil Demand
According to OPEC’s monthly report, the global demand for oil is expected to increase by 2.25 million barrels per day in 2024 and by 1.85 million barrels per day in 2025. These forecasts remained unchanged from the previous month, indicating a consistent trajectory in oil demand growth.
Potential Impact on Oil Prices
The prospect of enhanced economic expansion could provide an added boost to oil prices, which have already surged above $90 per barrel this year due to tighter supply conditions and ongoing conflicts in the Middle East. Last week, OPEC and its allies, collectively known as OPEC+, agreed to maintain oil output cuts until the end of June.
Optimistic Outlook for Global Economic Growth
OPEC’s report conveyed an optimistic sentiment regarding the potential for global economic growth in 2024, stating, “Despite some downside risks, the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024.” OPEC+ members are scheduled to convene in June to decide on the extension of output cuts or the gradual reintroduction of supply into the market.
Maintaining Market Balance
The report emphasized the importance of vigilantly monitoring the oil market, especially during the summer months, to ensure a stable and sustainable market equilibrium amidst existing uncertainties. Despite the new voluntary output cuts implemented by OPEC+ members since January, oil production by OPEC nations remained steady in March, increasing by 3,000 barrels per day to reach 26.60 million barrels per day.