Resilient global economy to lift oil demand to 104.5m bpd in 2024: Opec

For 2024, oil demand growth is at 2.2 million bpd, producer group says

by

Issac John

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Working oil pumpjacks dot the landscape on oilfields on the outskirts of Taft, Kern County, California. — AFP
Working oil pumpjacks dot the landscape on oilfields on the outskirts of Taft, Kern County, California. — AFP

Published: Wed 29 May 2024, 6:09 PM

Last updated: Wed 29 May 2024, 6:10 PM

The Organisation of Petroleum Exporting Countries (Opec) said it remains optimistic about a robust oil demand growth in 2024 and 2025 with the global economy turning relatively resilient in recent months.

“For 2024, oil demand growth is at 2.2 million bpd (barrels per day), with total global demand anticipated to average 104.5 million bpd,” Opec Secretary General Haitham Al Ghais said ahead of the meeting of the Opec plus group this coming weekend. The meeting will decide how to proceed with the current production cuts in the second half of the year.


In 2025, the global oil demand growth forecast shows a further robust expansion of 1.8 million bpd year-over-year, averaging 106.3 million bpd, Al Ghais told the Special Session of the 141st Meeting of Opec’s Economic Commission Board.

The Opec chief’s bullish oil demand outlook is in line with the projection given by Goldman Sachs. Analysts at the US bank said global oil demand is set to grow for at least another decade as the slowing momentum of electric vehicle sales keeping oil product demand robust until 2034.


In its recent monthly report Opec said that a resilient global economy early this year has additional upside potential in the second half with the possible easing of monetary policies.

The group estimates that global oil demand rose by 2.4 million bpd in the first quarter of 2024. For the full year, total world oil demand is anticipated to reach 104.5 million bpd, driven by “strong air travel demand and healthy road mobility, including trucking, as well as industrial, construction, and agricultural activities in non-OECD countries.”

“Despite certain downside risks, the continued momentum observed since the start of the year could create additional upside potential for global economic growth in 2024 and beyond,” the organisation said.

Analysts at Goldman Sachs raised their forecast of oil demand in 2030 to 108.5 million barrels per day (bpd) from 106 million bpd previously expected.

Goldman Sachs now expects global oil demand to peak in 2034, at around 110 million bpd. This will be followed by years of plateau oil demand until around 2040, according to the bank’s analysts led by Nikhil Bhandari.

“We expect peak oil demand to occur by 2034 at 110 million bpd; subsequently, we project a moderate compounded annual growth rate demand decline of 0.3 per cent till 2040,” analysts at Goldman Sachs wrote in the report.

Most of the world’s global oil demand growth will come from emerging markets in Asia, led by China and India, say the analysts, echoing the views of all other forecasters who expect these two economies to be the top contributors to oil demand growth globally in the coming decade.

Goldman Sachs recently said that “Sales momentum for electric vehicles is slowing globally, and hybrids and plug-in hybrids are proving more competitive than first thought.”

As sales flag, Goldman Sachs research analyst Kota Yuzawa says the team’s bear case for EV sales is becoming more likely. “Several automakers have said that concerns about driving range and charging infrastructure are increasing. These issues may lead consumers to have second thoughts about buying an EV,” Goldman’s Yuzawa said.



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