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OPEC forecasts oil market growth with 2.25mbd demand in 2024

The Organization of Petroleum Exporting Countries, OPEC, has again expressed optimism on robust oil market growth.

In its Monthly Oil Market Report (MOMR) out the OPEC maintained its forecast from the April report, which sees global oil demand rising by 2.25 million barrels per day (bpd) this year and by another 1.85 million bpd next year.

OPEC 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.”

Petrochemical capacity expansions in China and the Middle East are also set to boost demand growth this year, according to the cartel.

“The global economy showed resilience in 1Q24, with key economies demonstrating stable growth that, in certain instances, surpassed initial projections,” OPEC said.

A resilient global economy early this year has additional upside potential in the second half with the possible easing of monetary policies, OPEC said on Tuesday, keeping its 2024 and 2025 outlook of robust oil demand unchanged from last month.

The organization kept its world economic growth forecasts for 2024 and 2025 at 2.8 per cent and 2.9 per cent, respectively, but slightly raised its estimates of the U.S. economy this year and next. OPEC now expects the U.S. economy to grow by 2.2 per cent this year, up from 2.1 per cent in last month’s report, and by 1.9 per cent next year, up by 0.2 percentage points compared to the April assessment.

Regarding the world economy, OPEC said “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.”

An expected shift towards more accommodative monetary policies by major central banks in the second half of the year, and a more robust growth trajectory in Asia, notably India and China, may also contribute to the acceleration of global economic growth, OPEC noted.

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