Global oil demand growth needs to accelerate in the coming months to absorb the increased supply that OPEC+ plans to introduce from October.
Current demand from major consumers like the U.S. and China has fallen short of expectations, raising concerns that a slower economy could further dampen demand.
If growth does not meet forecasts, OPEC+ may need to reconsider its planned production increases or accept lower prices.
Oil prices have dropped below $80 per barrel, impacting many OPEC+ members’ budgets. With concerns about potential economic slowdowns in the U.S. and China, analysts predict that OPEC+ might delay its output increase.
Both the IEA and OPEC have differing estimates for first-half 2024 demand growth, adding uncertainty to future projections.
OPEC+ has confirmed its intention to raise production from October but will review market data before proceeding.
The group relies on demand reaching their forecasts to justify the increase.
With varying demand signals from China and the U.S., and the impact of economic uncertainties, the market’s ability to absorb additional oil supply remains in question.