OPEC sticks to oil demand view, shifts key forecast to OPEC+

OPEC stuck to its forecast for strong growth in global oil demand in 2024 and said it would switch to focus on projected demand for OPEC+ crude, reflecting that the wider group is now the main forum for cooperation in the market.

The Organization of the Petroleum Exporting Countries, in a monthly report, said it expected world oil demand to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

This is the last report before OPEC+, which groups OPEC and allies led by Russia, meets on June 1 to decide whether to extend voluntary oil output cuts into the second half of the year. OPEC sounded an upbeat tone on the economic outlook.

"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," OPEC said in the report.

OPEC+ has implemented a series of output cuts since late 2022 to support the market. The latest cut of 2.2 million bpd is in place until the end of June unless it is extended, as some OPEC+ sources have said it could be.

There is a wider than usual split between forecasters on the strength of oil demand growth in 2024, partly due to differences over the pace of the world's transition to cleaner fuels.

The International Energy Agency, which represents industrialised countries and forecasts oil demand will peak by 2030, sees an expansion of 1.2 million bpd and is scheduled to update its figures on Wednesday.

OPEC believes oil use will keep rising for the next two decades and has not forecast a peak.