OPEC Holds Steady: Maintains 2023 and 2024 Oil Demand Predictions

In its latest monthly oil market report, OPEC announced that it maintains its projections for oil demand growth in 2023 and 2024. The organization expects the global economy to pick up its pace this year. For 2024, OPEC foresees an increase in world oil demand by 2.25 million barrels per day (bpd), a slight dip from the 2.44 million bpd growth anticipated for this year. At the same time, OPEC has slightly revised its 2023 global economic growth projection, raising it to 2.8% from the previous 2.7%. According to OPEC, emerging economies in Asia, particularly India, and countries like Brazil and Russia, are poised to surpass expectations due to domestic demand and external trade improvements. These forecasts remain consistent with the previous month’s assessment.

China’s Economic Recovery Challenges Despite Stimulus Measures:

The economic recovery of Asian countries, especially China, has faced challenges post-COVID-19, primarily due to a deepening property slump and weak consumer spending. China, the world’s second-largest economy and the leading crude oil importer, has introduced various stimulus measures to address these issues. These measures include halving the stamp duty on stock transactions and easing mortgage rates, indicating a commitment to boosting the economy.

OPEC’s Outlook on Non-OPEC Supply and Production Policies:

OPEC has adjusted its forecast for non-OPEC supply growth in 2023, increasing it from 1.6 million bpd to 1.7 million bpd. The main drivers behind this growth are expected to be the United States, Brazil, Norway, Kazakhstan, Guyana, and China. On October 4, the OPEC+ group, which includes Saudi Arabia and Russia, decided to maintain their current output policy. They reaffirmed their collective supply cut of 1.3 million barrels per day until the year’s end. Looking ahead to 2024, the projection for non-OPEC crude supply expansion remains unchanged at 1.4 million barrels per day from the previous month.

OPEC’s Production and Global Impact:

According to secondary sources, OPEC’s crude oil production increased by 273,000 barrels per day in September, reaching 27.75 million barrels per day. The group has been enforcing total production cuts of 3.66 million bpd, roughly 3.7% of global demand. This includes a reduction of 2 million bpd that was agreed upon last year, along with voluntary cuts of 1.66 million bpd announced in April and extended until December 2024.

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Meanwhile, the International Energy Agency (IEA) has adjusted its oil demand growth forecast for the following year downward due to a “deteriorating economic climate,” which is expected to impact crude consumption. The IEA anticipates global oil demand to expand by nearly 900,000 bpd in the coming year, a decrease from its previous estimate of 1 million bpd. The International Monetary Fund has also kept its 2023 global economic expansion forecast at 3%, slightly below the 3.5% expansion observed in the previous year but still in line with the historical growth average of 3.8%.