Home News OPEC Expects Global Oil Demand to Slow in 2025

OPEC Expects Global Oil Demand to Slow in 2025

452
0

The Organization of the Petroleum Exporting Countries (OPEC) projects a decline in global oil demand for the upcoming year, despite an improved economic forecast fueled by easing inflation and global growth. In its monthly oil-market report, the Vienna-based oil-producers’ cartel states that it foresees oil-demand growth of 1.8 million barrels per day in 2025, driven by a robust Chinese economy. This estimate falls below the current year’s demand growth projection, which OPEC maintains at 2.2 million barrels per day.

OPEC predicts that global economic growth will strengthen next year, expanding to 2.8% from an estimated 2.6% in the current year. This positive growth outlook is attributed to expected interest rate cuts by central banks commencing in the latter half of 2024. According to OPEC, non-OECD economies, including China, India, and other Asian developing economies, will play a crucial role in driving global economic growth in the upcoming year.

The United States is anticipated to experience a rise in economic growth to 1.5% in 2025, compared to an estimated 1% in the current year. The eurozone is also expected to see an uptick in economic growth, forecasted at 1.2% in 2025 versus 0.5% this year.

While OPEC releases its latest report, oil futures have declined by more than 20% since approaching $100 per barrel in September. Market sentiment remains divided due to concerns over weaker economic growth and escalating tensions in the Middle East. The recent series of attacks on commercial ships in the Red Sea by Iran-backed Houthis has added to uncertainties.

Currently, the international benchmark, Brent crude, trades at approximately $77 per barrel, briefly touching $80 per barrel last week. The U.S. oil gauge, WTI, is currently trading at around $71 per barrel.

Crude Oil Futures Prices Hit Lowest Levels Due to Selling Pressure, OPEC Reports

Crude oil futures prices continued their decline in December, reaching their lowest levels since late June, as reported by OPEC. According to the organization, this downward trend was primarily driven by selling pressure from speculators, who showed a consistent increase in bearish positions.

In November, OPEC and its allies agreed to implement voluntary output cuts of around 2.2 million barrels a day over the first quarter of this year. The aim was to stabilize prices amidst concerns over subdued demand and weaker economic growth.

Despite the ongoing production cuts by Saudi Arabia and other OPEC members, the cartel produced more crude oil in December. The increase in output was mainly due to higher production from Nigeria and Iraq.

The cartel revealed that overall crude oil production rose by 73,000 barrels a day to 26.7 million barrels a day compared to November levels, according to secondary sources.

Nigeria experienced a significant increase in oil production, with a daily output rise of 100,000 barrels to 1.42 million barrels in December. Similarly, Iraq recorded an increase of 23,000 barrels a day to reach 4.29 million barrels a day. However, Saudi Arabia reported a decrease of 12,000 barrels a day, bringing its output down to 8.96 million barrels a day.

In addition, OPEC revised its non-OPEC supply growth forecast for 2024 to 1.3 million barrels a day from the previous expectation of 1.4 million barrels a day. The organization also stated that it anticipates stable growth in 2025.

The International Energy Agency is scheduled to release its monthly report on Thursday.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

33  +    =  42