OPEC+ has once again lowered this year’s forecast for oil demand growth worldwide, causing crude prices to fall by nearly 2%.
The oil-producing bloc released a monthly oil market report Monday showing global demand growth dropping for the third consecutive month. Previously, the forecast had been unchanged since July 2023, according to Reuters.
OPEC+ forecasts global oil demand to grow by 1.93 million barrels per day in 2024, down from the 2.03 million barrels expected in September’s report.
OPEC+ also cut its demand forecast for 2025. The report revealed that the group now expects demand to grow by around 1.6 million barrels per day next year, down from the previous forecast of 1.7 million barrels.
The oil bloc said those forecast changes were “largely due to actual data received combined with slightly lower expectations” in some regions, according to Bloomberg.
Shortly after the report was released, crude oil prices dropped. By around 10 a.m. international benchmark Brent crude was priced at $77.99 after decreasing by $1.05. West Texas Intermediate crude also dropped by $0.91 to $74.65.
Those prices, much higher than the lows seen in early September, have alleviated some pressure on consumers at the pump. However, they are reportedly still too low for several OPEC+ member countries that are due to begin restoring oil output in December.
OPEC+ was originally set to increase oil production to 180,000 barrels a day in October but reversed the decision in an effort to support falling prices. Eight member nations — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman — agreed to cut back production by 2.2 million barrels per day through the end of November.
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However, Monday’s report indicates that three of those members — Iraq, Kazakhstan, and Russia — have failed to lower their outputs.
In September, Russia and Iraq remained above their respective output ceilings of 9 million and 4 million barrels per day, despite cutting production, according to the report. Meanwhile, Kazakhstan increased output by 75,000 barrels per day reaching 1.545 million.