OPEC published its forecast for oil demand in 2024 and it is slightly above what had been predicted but still below this year’s forecasts. However, the organization reported that it expects non-OPEC supply to grow in 2024.
Global GDP growth is forecasted to be 2.5% in 2024, carried mainly by China and India, which will contribute to half of next year’s growth. The forecasted growth is slightly below the expected growth level of 2.6% for this year. OPEC states that tight monetary policies are expected to continue, with key policy rates peaking by the end of 2023.
OECD GDP growth is expected to be 0.9% in 2024, down from 1.1% in 2023. Non-OECD countries are expected to experience GDP growth of 3.9% in 2024, the same level as in 2023. Nevertheless, uncertainties still loom fueled by high inflation, monetary tightening and elevated global debt levels.
As for oil, global demand is set to grow by 2.2MMb/d year-on-year in 2024. This growth is driven by the ongoing rebound of Chinese economic activity and strong expansion in other non-OECD countries. OECD oil demand is forecasted to rise by 0.26MMb/d year-on-year, while non-OECD oil demand is expected to show a substantial increase of nearly 2.0MMb/d, primarily led by China and India.
The demand for transportation fuels, including jet fuel and gasoline, is anticipated to be the main driver of oil demand growth in 2024, fueled by a further recovery in air travel and increased road mobility in major consuming countries like China, India and the US. Moreover, diesel demand is expected to receive support from both on-road diesel, including trucking, and healthy industrial, construction and agricultural activities in non-OECD countries. Light distillates are projected to benefit from capacity additions, while non-OECD countries' petrochemical margins are expected to remain healthy.
On the supply side, non-OPEC oil supply is forecasted to grow by 1.4MMb/d year-on-year in 2024, driven by strong demand and upstream investments. Upstream CAPEX investment in non-OPEC countries is expected to reach around US$480 billion, approximately the same level as in 2023 and 9% higher than in 2022. The US’ liquids production growth in 2024 is forecasted to be 0.7Mb/d, mainly due to increased Permian and Gulf of Mexico crude and non-conventional natural gas liquids (NGLs) production. Furthermore, oil production in Canada, Guyana, Brazil, Norway, Kazakhstan and Argentina is expected to rise through new field startups, ramp-ups and the optimization of existing projects.
Early July, OPEC Secretary General Haitham Al Ghais announced ongoing discussions with Mexico, Azerbaijan, Malaysia and Brunei regarding their potential membership in the organization. These dialogues signify a strategic endeavor to fortify OPEC's position and enhance price stabilization in the aftermath of the prolonged volatility witnessed in the wake of the COVID-19 pandemic.