OPEC sticks to oil-demand view, posts fall in overall output
Summary
OPEC left its estimates for global oil-demand growth unchanged for this year and next, while reporting a fall in crude output as the market awaits the cartel’s next production policy move at its upcoming meeting in June.The Organization of the Petroleum Exporting Countries left its estimates for global oil-demand growth unchanged for this year and next, while reporting a fall in crude output as the market awaits the cartel’s next production policy move at its upcoming meeting in June.
The Vienna-based group said in its monthly report that it continues to forecast oil demand to grow by 2.2 million barrels a day this year and by 1.8 million barrels a day in 2025, unchanged from its previous estimates.
The cartel’s latest report comes as oil prices trade rangebound after dropping to mid-March levels earlier this month. Bearish sentiment is driven by prospects of higher-for-longer interest rates in the U.S. due to persistent inflation pressures and reduced geopolitical risk as oil supplies remain largely unaffected by the war in Gaza.
Brent crude, the international benchmark, currently trades at around $83 a barrel compared with around $90 a barrel a month ago, while WTI, the U.S. oil gauge, is at around $79 a barrel compared with $86 a barrel in mid-April.
OPEC raised its U.S. economic-growth estimates to 2.2% for 2024 from 2.1% previously, and to 1.9% from 1.7% for 2025. The global economic-growth forecast was maintained at 2.8% for the current year and 2.9% for 2025, with the eurozone growth forecast unchanged at 0.5% this year and 1.2% the next.
Overall OPEC crude-oil production fell by 48,000 barrels a day to 26.575 million barrels a day in April, the cartel said, citing secondary sources. Earlier this year, OPEC+ extended its voluntary output cuts totaling around 2.2 million barrels a day until the end of June, and is now set to decide on its next policy move at its meeting on June 1. Most analysts expect the cartel and its allies to extend cuts to the second half of the year in a bid to prop up prices.
Iraq’s oil production fell by 32,000 barrels a day to 4.18 million barrels a day in April, while Nigerian production decreased 46,000 barrels a day to 1.35 million barrels a day. Iran’s production rose by 14,000 barrels a day to 3.21 million barrels a day. Oil production from Saudi Arabia rose by 2,000 barrels a day to 9.03 million barrels a day.
The International Energy Agency is due to release its monthly oil report on Wednesday. The Paris-based agency’s current projections are substantially lower than OPEC’s, with oil-demand growth estimated at 1.2 million barrels a day for this year and 1.1 million barrels a day for next year.
Write to Giulia Petroni at giulia.petroni@wsj.com
