OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and said 2025 will see a robust increase in oil use, led by China and the Middle East, in a surprise early prediction.
The 2025 forecast is in line with the Organization of the Petroleum Exporting Countries' view oil use will keep rising for the next two decades, in contrast to bodies such as the International Energy Agency, which predicts it will peak by 2030 as the world shifts to cleaner energy.
OPEC, in a monthly report, said world oil demand will rise by 1.85 million barrels per day in 2025 to 106.21 million bpd. For 2024, OPEC saw demand growth of 2.25 million bpd, unchanged from last month.
Oil prices, though, have started the year on a weak footing as uncertainty in the market about demand has offset the impact of a new round of supply cuts by OPEC and its allies. Brent crude LCOc1 on Wednesday was trading around $77 a barrel, down almost 2%.
The 2025 prediction is OPEC's first in its monthly report and would have been expected in July 2024 based on previous practice. OPEC said it had published the forecast earlier than usual to provide long-term guidance for the market.
"The undertaking to reach beyond the previously established time horizon of short-term forecasting serves to support the understanding of market dynamics," OPEC said in the report.
OPEC's expectation of oil demand growth for 2024 is much more than the expansion of 1.1 million bpd so far forecast by the IEA. The IEA, which represents industrialised countries, is scheduled to update its forecasts on Thursday.
In 2025, OPEC anticipates an increase in global economic growth to 2.8% from 2.6% this year in part because of interest rate cuts. China, the Middle East and India will drive the increase in oil consumption, OPEC said.
According to the IEA, global oil demand growth will halve in 2024 as a result of below-trend economic growth in major economies, efficiency improvements and a booming electric vehicle fleet.
Apart from their differing views on long-term oil demand, OPEC and the IEA have also clashed in recent years on the need for investment in new oil supplies.