Daily Crude Oil Demand Drops from 2.11 Million Barrels to 2.03 Million Barrels
The Organization of the Petroleum Exporting Countries (OPEC) has lowered its oil demand forecast for this year, citing a slowdown in demand from China. Amid concerns over economic slowdowns in both China and the United States, international oil prices are expected to remain weak, with Brent crude falling to the $60 range for the first time in over two years.
On the 9th (local time), OPEC projected that oil demand will increase by 2.03 million barrels per day this year and by 1.74 million barrels per day next year. Last month, the forecast was for increases of 2.11 million barrels and 1.78 million barrels per day, respectively, indicating a slight downward revision in oil demand forecasts within a month. Total demand is expected to reach 104.2 million barrels per day this year and 106 million barrels per day next year.
The reason for the downward revision in oil demand is China. China's oil demand growth for this year was revised down from an increase of 700,000 barrels per day to 650,000 barrels per day. OPEC pointed out that China is facing economic difficulties and that efforts to transition to clean energy have slowed oil demand.
OPEC stated, "China's economic growth is still expected to be supported," but also analyzed that "the real estate sector is facing difficulties, and the increase in liquefied natural gas (LNG) trucks and electric vehicles may reduce demand for diesel and gasoline."
Major investment banks (IBs), including Goldman Sachs, have previously lowered their international oil price forecasts due to the slowdown in Chinese oil demand and oversupply from oil-producing countries.
The day before, Morgan Stanley forecasted that Brent crude, the global oil price benchmark, would average $75 per barrel in the fourth quarter. Morgan Stanley had already lowered its Brent crude price forecast from $85 to $80 per barrel last month and has now made a further downward revision. In addition to Morgan Stanley, Goldman Sachs, Citigroup, and Bank of America (BoA) have also lowered their oil price forecasts. Citigroup predicted that the current oil market is oversupplied and that if OPEC Plus (+) does not implement additional production cuts, oil prices could fall to $60 per barrel in 2025.
International oil prices have recently fallen to their lowest levels since the end of 2021 due to the slowdown in Chinese demand and concerns over a U.S. economic downturn. Prices dropped about 10% last week alone, marking the largest weekly decline in 11 months. In response, OPEC and OPEC+ have postponed their own production cut plans until the end of the year.
Currently, Brent crude is trading at $69.41 per barrel as of 11:03 a.m. today, down $2.43 (3.38%) from the previous day, falling below $70 per barrel for the first time in over two years. West Texas Intermediate (WTI) crude is down $2.57 (3.74%) at $66.14 per barrel.
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