OPEC Makes Deepest Cut Yet to 2024 World Oil Demand Forecast

OPEC cut oil demand growth forecasts for this year and next for a fifth straight month, making its deepest reduction to the 2024 outlook so far after agreeing to extend its supply curbs.

The Organization of Petroleum Exporting Countries chopped projections for consumption growth in 2024 by 210,000 barrels a day to 1.6 million barrels a day, according to its monthly report. The cartel has slashed projections by 27% since July as it belatedly recognizes the deteriorating market picture.

Last week, the OPEC+ alliance led by Saudi Arabia and Russia agreed for a third time to delay plans to restart halted crude production, while also slowing the pace of increases once they do begin next year. The first in a scheduled series of hikes was postponed to April from January. 

Oil prices have declined 17% since early July as China falters and supply from OPEC’s rivals in the Americas booms. Brent futures are trading near $73 a barrel, too low for the Saudis and many others in the coalition to cover government spending. 

OPEC’s Vienna-based secretariat said the revision takes “into account recently received bearish data” for the third quarter,” including “downward revisions to OECD Americas and OECD Asia Pacific.”

Despite the slew of downgrades, OPEC’s forecasts remain significantly higher than most others in the oil industry, and at odds with actual data for consumption this year.

The alliance’s growth projections for 2024 are roughly double those of Morgan Stanley and Goldman Sachs Group Inc., and considerably above the International Energy Agency in Paris. They’re even significantly higher than estimates from Saudi Arabia’s state oil company, Aramco.

Oil consumption

OPEC predicts that oil consumption will average 103.82 million barrels a day this year. It lowered growth estimates for 2025 by 90,000 barrels a day to 1.4 million barrels a day. 

The failure to accurately estimate oil demand this year casts further doubt on OPEC’s long-term expectation that oil consumption will keep growing to the middle of the century — a minority view even within the petroleum industry. 

OPEC+ has been withholding output since 2022 in a bid to stave off a surplus and shore up prices. With last week’s decision, its plan is now to revive 2.2 million barrels a day of halted output in modest slivers between April and late 2026.