Global oil demand seen to grow by 1.9 million bpd in 2024

FILE PHOTO: A gas station attendant pumps fuel into a customer’s car at the NNPC Mega petrol station in Abuja, Nigeria March 19, 2020. REUTERS/Afolabi Sotunde/File Photo

LONDON — Global oil demand will grow by 1.9 million barrels per day (bpd) this year, according to a prediction by energy research company Wood Mackenzie, a forecast close to the Organization of the Petroleum Exporting Countries’ (OPEC) estimate for 2024.

In remarks shared with delegates at a Wood Mac briefing on Wednesday during the Energy Institute conference in London, the firm’s vice president of oils research Alan Gelder predicted, like most other forecasters, that the bulk of that rise would come from China and India.

Forecasts for oil demand growth in 2024 differ dramatically, reflecting contrasting views on how quickly the world will shift from fossil fuels.

OPEC believes oil use will keep rising over the next two decades, while the IEA, which represents industrialized countries, predicts it will peak by 2030.

OPEC, IEA forecasts

OPEC expects another year of relatively strong demand growth of 2.25 million bpd, while the International Energy Agency expects much slower growth of 1.22 million bpd.

READ : OPEC upbeat over 2024 oil demand outlook despite slowdown

Meanwhile, a wide-ranging Reuters survey showed most analysts expect global oil demand to grow by somewhere between 1 million and 1.5 million bpd in 2024.

Wood Mac’s prediction for demand growth in 2025 is lower at 1.4 million bpd. OPEC expects growth of 1.85 million bpd in 2025, while the IEA is expected to reveal its 2025 prediction in April.

OPEC+ has implemented output cuts since late 2022 to support the market, as output in the U.S. and other non-member producers has risen.

Output cuts

In November, OPEC+ agreed to voluntary output cuts totaling about 2.2 million bpd for the first quarter. Earlier this week, sources told Reuters that OPEC+ is considering extending the cuts into the second quarter, and could keep them in place until year end.

READ: OPEC+ agrees to deepen voluntary oil output cuts

Members can expect to be called upon to increase volumes to balance the market in 2024 despite the November decision, Wood Mac’s Gelder said, adding he assumes the cuts will be kept in place through the second quarter.

Oil prices have found support this year from rising geopolitical tensions including attacks by the Iran-aligned Houthi group on Red Sea shipping, although concern about economic growth and high interest rates in Western economies has weighed.

Brent crude was trading above $83 a barrel on Thursday.