OPEC on Thursday raised its forecast for oil demand growth for 2023 and predicted only a slight slowdown in 2024 despite economic headwinds as China and India continue to drive the expansion in fuel use, APA reports citing Reuters.
In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said it expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024, a rise of 2.2%, compared with growth of 2.44 million bpd in 2023.
Oil added to an earlier gain after OPEC's report was published.
Oil demand growth is an indication of likely oil market strength and forms part of the backdrop for policy decisions by OPEC and its allies, known as OPEC+. The group in June extended supply curbs into 2024 to support the market.
The outlook for 2024 suggests oil demand will rise more rapidly than supply from producers outside OPEC.
OPEC expects non-OPEC supply to rise by 1.4 million bpd, lagging demand growth and the same rate as 2023.
As a result, OPEC forecast the world will need 30.2 million bpd in 2024 from its members to balance the market, up 800,000 bpd from 2023.
For now, OPEC is pumping far less.
The report showed OPEC production rose by 91,000 bpd to 28.19 million bpd in June, led by Iran and Iraq. Iran is one of the OPEC members exempt from cutting output.
The United States is expected to make the biggest contribution to non-OPEC supply expansion next year although OPEC sees growth in U.S. tight oil, another term for shale, slowing to 500,000 bpd in 2024 from 730,000 bpd in 2023.
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