OPEC sees robust summer oil demand, economic upside potential

The Organization of the Petroleum Exporting Countries on Thursday predicted robust fuel use in the summer months and stuck to its forecast for relatively strong growth in global oil demand in 2024, while saying there was a chance the world economy could do better than expected this year, according to Reuters.

OPEC, in a monthly report, said world oil demand will rise by 2.25 million barrels per day in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

A boost to economic growth could give extra tailwind to oil prices, which have rallied above $90 a barrel this year on tighter supply and war in the Middle East.

OPEC and its allies, known as OPEC+, last week agreed to keep oil output cuts in place until the end of June.

“Despite some downside risks, the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024,” OPEC said in the report.

OPEC+ will meet in June to decide whether to extend output cuts further or return some supply to the market.

“The robust oil demand outlook for the summer months warrants careful market monitoring, amid ongoing uncertainties, to ensure a sound and sustainable market balance,” the report said.

The OPEC report also said that oil production by its members was steady in March, rising by 3,000 bpd to 26.60 million bpd, despite the new round of voluntary output cuts by OPEC+ members that started in January.