The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday, December 11, lowered its forecasts for oil demand growth this year and next, noting weakness in China and India. This is the fifth consecutive revision of forecasts by the cartel of producers, who already have rather inflated expectations compared to other forecasts.

In its December report, OPEC indicates an expected increase in global oil demand in 2024 of 1.61 million barrels per day, a 210,000-barrel downward revision from its November forecast. Until August, forecasts remained unchanged, but data in recent months have forced producers to revise them.

The weaker outlook poses a challenge to OPEC+, the coalition of OPEC and its allies such as Russia. As a result of declining prices, OPEC+ has postponed planned production increases until April 2025, Reuters reports.

Downward revisions were made for China, India, the rest of Asia, the Middle East and Africa based on new data. Forecasts for OECD countries in the Americas and Asia-Pacific were also lowered. This was only partially offset by higher forecasts for demand in OECD countries in Europe.

According to OPEC data, Chinese oil demand decreased by 81,000 barrels per day in October compared to the same period last year, while September saw an increase of 57,000.

Forecasts for 2025 have also been lowered - from the previously assumed 1.54 million barrels per day to 1.45 million. Nevertheless, global demand is expected to increase on an annualized basis from 103.82 million barrels per day in 2023 to 105.27 million in 2025.

OPEC still forecasts higher demand growth than the International Energy Agency (IEA), which represents developed countries. The IEA forecasts demand growth of 920,000 barrels per day in 2024, while OPEC assumes an increase of 1.6 million. The IEA's new forecasts are due to be published on Thursday.