OPEC sees strong demand for oil in the world

OPEC on Thursday forecast robust fuel consumption in the Northern Hemisphere’s summer months and maintained its forecast for relatively strong growth in global oil demand in 2024, highlighting an unusually wide gap between oil demand forecasts.

The Organization of the Petroleum Exporting Countries, in a monthly report, said global oil demand will increase by 2.25 million barrels per day (bpd) in 2024 and 1.85 million barrels per day in 2025.

Both forecasts are unchanged from last month.

A boost to economic growth could give a further boost to oil prices, which have risen above $90 a barrel this year due to reduced supplies and war in the Middle East.

Last week, OPEC and its allies, known as OPEC+, agreed to maintain oil production cuts until the end of June.

Looking ahead to the summer, when fuel demand will increase seasonally as people travel more, OPEC said global demand for jet fuel will increase by 600,000 barrels per day from a year earlier in the second quarter, petrol at 400,000 barrels per day and diesel at 200,000 barrels per day.

Following last week’s meeting of a group of key OPEC+ ministers, the full group will meet in June to decide whether to further extend production cuts or return some supply to the market.

“The prospect of strong oil demand for the summer months merits close market monitoring, amid current uncertainties, to ensure a robust and sustainable market balance,” the report said.

OPEC expects global economic growth of 2.8% in 2024, unchanged from last month, and says the U.S. economy is poised to give its traditional summer boost to fuel demand.

Source: Terra

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