OPEC slightly improved its forecast for oil demand this year

Contrary to expectations of weaker global demand, OPEC slightly improved its forecast for oil demand this year, pointing to continued “fundamentally strong” market parameters. The forecast for demand growth compared to last year was raised from 2.44 million barrels per day (b/d) to 2.46 million – demand is now estimated at 102.11 million b/d, the cartel said in its monthly report. The organization did not change the forecast for 2024, but this estimate also remains high – 104.36 million bpd (plus 2.25 million bpd). OPEC considers China to be the main factor supporting the market – the average annual figure could also be a record high and exceed the 2022 value by 1.2 million bpd. The same dynamics are observed in India (data for September, cited by OPEC, in both cases showed a reduction in imports; Chinese statistics for October, on the contrary, showed an increase of 3.5%). The organization explains the increase in reserves by “seasonal trends, in particular planned work at refineries.”

Oil supply in countries outside the cartel may increase by 1.8 million bpd this year, and by another 1.4 million bpd in 2024, the organization expects. OPEC countries produced 27.9 million bpd in October, which is 80 thousand bpd more than in September. Production was increased by Iran (by 46 thousand b/d, the country is not subject to restrictions of the OPEC+ agreement) and Angola (by 51 thousand b/d), while Libya, Saudi Arabia and Kuwait reduced production. Actual production of OPEC+ countries remains below quota levels, taking into account voluntary restrictions.

In Russia, production in September increased by 85 thousand b/d, to 10.8 million b/d, including 9.5 million b/d of oil and 1.3 million b/d of gas condensate. The forecast for this year was improved by 80 thousand bpd – year-on-year supply reduction could be 400 thousand bpd (up to 10.6 million bpd). Let us recall that the Russian side announced its intention to adhere to the supply limit of 300 thousand bpd until the end of the year. According to OPEC, in September Russia provided almost 19% of China’s total oil imports, Saudi Arabia accounted for 14% of supplies, and Malaysia accounted for about 11%. In India, according to the analytical agency Kpler, cited by OPEC, Russia has been the leader in oil supplies for a year now, providing 36% of the country’s total imports in September. Iraq and Saudi Arabia provided 20% of supplies to India each.

Tatiana Edovina