OPEC maintains its oil-demand perspective
The Organization of the Petroleum Exporting Countries maintained its projections for global oil-demand growth for this year and next. However, it did report a decline in crude output. The market is eagerly anticipating the cartel’s next production policy decision, which will be made at its upcoming meeting in June.
In its monthly report, the Vienna-based group stated that it maintains its forecast for oil demand to increase by 2.2 million barrels a day this year and by 1.8 million barrels a day in 2025. These estimates remain unchanged from their previous projections.
The latest report from the cartel coincides with oil prices trading within a narrow range, having recently fallen to levels not seen since mid-March. The bearish sentiment is fueled by expectations of prolonged higher interest rates in the U.S. as a result of ongoing inflationary pressures and the limited impact of the Gaza conflict on oil supplies.
The price of Brent crude, the international benchmark, has dropped to approximately $83 per barrel from around $90 per barrel a month ago. Similarly, WTI, the U.S. oil gauge, is currently priced at around $79 per barrel, down from $86 per barrel in mid-April.
The U.S. economic-growth estimates for 2024 have been revised by OPEC to 2.2% from the previous 2.1%, and to 1.9% from 1.7% for 2025. The global economic-growth forecast remains steady at 2.8% for the current year and 2.9% for 2025, while the eurozone growth forecast remains unchanged at 0.5% this year and 1.2% the next.
In April, the cartel reported a decrease in OPEC crude-oil production to 26.575 million barrels a day, a decline of 48,000 barrels a day, according to secondary sources. In the past year, OPEC+ decided to continue its voluntary output cuts, amounting to approximately 2.2 million barrels per day, until the end of June. The upcoming meeting on June 1 will determine the next steps in their policy. Analysts widely anticipate that the cartel and its allies will prolong cuts into the second half of the year, aiming to bolster prices.
In April, Iraq experienced a decline in oil production, with a daily decrease of 32,000 barrels to reach 4.18 million barrels. Similarly, Nigerian production also saw a decrease of 46,000 barrels per day, resulting in a daily output of 1.35 million barrels. Iran’s production increased by 14,000 barrels per day, reaching a total of 3.21 million barrels per day. The oil production from Saudi Arabia increased by 2,000 barrels per day, reaching a daily total of 9.03 million barrels.
The International Energy Agency is set to publish its monthly oil report on Wednesday. The projections from the Paris-based agency are significantly lower compared to OPEC’s. They estimate that oil-demand growth will be around 1.2 million barrels a day for this year and 1.1 million barrels a day for next year.
