OPEC predicts robust oil demand growth next year

The Organization of the Petroleum Exporting Countries (OPEC) forecast "robust" global oil demand growth of 1.8 million barrels per day (bpd) in 2025, backed by strong global economic recovery and "continued solid economic activity in China."

OPEC predicted in its first assessment of next year's oil demand levels, which was included in its monthly oil market report published on Wednesday.

Global oil demand growth next year will be driven by nearly 1.7-million-bpd growth in non-OECD (the Organization for Economic Co-operation and Development) countries, mostly in China, the Middle East, India and other Asian countries, according to the report.

For 2024, OPEC expected global oil demand to rise by 2.2 million bpd compared to last year, unchanged from the prediction in last month's report.

OPEC, in Wednesday's report, predicted the yearly global economic growth to reach 2.8% next year, up from a 2.6% growth forecast for 2024.

"This positive trajectory is in line with the expectation that general inflation will continue to diminish throughout 2024 and into 2025, particularly in major economies. A shift towards increasingly accommodative monetary policies is anticipated for the second half of 2024 and throughout 2025, with key policy rates expected to peak in the first half of 2024," OPEC explained.

In terms of oil supply, the organization expected non-OPEC production to rise by 1.3 million bpd in both 2024 and 2025.

OPEC's latest forecasts came on the same day that the oil-producer group's Secretary General Haitham Al Ghais rebutted predictions that oil demand is approaching a peak.

"Peak oil demand is not showing up in any reliable and robust short- and medium-term forecasts," Al Ghais said in a statement, countering predictions from the International Energy Agency (IEA) that global oil demand will peak before the end of this decade.

IEA, whose members mainly include oil-consuming nations such as the United States, Japan and some European countries, has been more bearish on the global oil demand outlook than OPEC. Last year, the agency predicted peak oil demand by the end of this decade. In December, IEA forecast global oil demand growth of 1.1 million bpd in 2024, barely half of OPEC's predictions, citing slow economic growth, efficiency improvements and growing deployment of electric vehicles.