Opec said today it expects oil demand to continue to grow in 2025, although at a slower pace than its forecast for this year.
In its first Monthly Oil Market Report (MOMR) of the year, Opec has brought forward its first 2025 forecast. It projects demand to grow next year by 1.85mn b/d. The forecast for 2025 is lower than for this year, which Opec kept unchanged from its previous MOMR at 2.25mn b/d.
It bases these on world economic growth forecast at 2.8pc in 2025 and this year's expectation of 2.6pc. Much of this growth will be driven by key oil consumers such as India, it said.
Opec said supply will fall in the first quarter of 2024, and it has lowered its demand estimate for that period by 270,000 b/d, suggesting a market in supply surplus. Six members of the Opec+ group pledged to cut their production by a combined 700,000 b/d in the January-March period, on top of Saudi Arabia's 1mn b/d output reduction.
Opec also lowered its demand projection for the final quarter of the year by 90,000 b/d. But it anticipates a 280,000 b/d rise in demand in the second quarter and a 90,000 b/d increase in the third quarter when seasonal consumption picks up. It puts this down to "strong air travel demand and healthy road mobility".
The group sees non-Opec liquids supply growth this year at 1.34mn b/d, slightly lower than the 1.37mn b/d in its previous MOMR. A downward revision to expected growth of Angolan production largely offset an increase in the forecast for Azerbaijan's output. The overall growth is largely driven by US shale production and offshore projects coming online in Latin America, Opec said.
For 2025 Opec sees non-Opec supply growth of 1.27mn b/d with the US and Brazil again driving growth, while output from Mexico and Angola are projected to fall again.
Opec crude production was 26.70mn b/d in December, according to an average of secondary sources that includes Argus. This was up from 26.63mn b/d in November. The group's collective output fell to 27.01mn b/d in 2023 from 27.73mn b/d in 2022, again according to the secondary sources. These totals were all adjusted to account for Angola's exit from Opec membership.
Opec lowered its forecast call on its own members' crude to 28.49mn b/d in 2024 from its previous estimate of 29.89mn b/d.
