By Faridat Salifu
Organisation of Petroleum Exporting Countries, OPEC, has projected a 2.2 million barrels per day increase in global oil demand for 2024.
This is contained in its latest monthly report released in December. It said the growth is expected to have a significant impact on the balance of supply and demand in the global oil market.
The body also forecast that the Organization for Economic Cooperation and Development (OECD) will contribute a 0.3 mb/d increase, primarily driven by OECD Americas.
Non-OECD regions, particularly China and the Middle East, according to OPEC, are expected to lead with a 2.0 mb/d year-on-year increase, influenced by Asia and India.
This anticipated growth is attributed to sustained economic activity and petrochemical demand in major consumer nations, driving the need for transportation fuels and distillates in 2024.
On the supply side, non-OPEC supply growth is expected to reach 1.8 mb/d in 2023, with the United States accounting for approximately 70% of this expansion.
Also, non-OPEC supply is projected to expand by 1.4 mb/d year-on-year, driven by factors such as US tight oil output, offshore start-ups in Latin America and the North Sea, and the expansion of oil sands projects in Canada.
The report acknowledges a stronger-than-expected economic growth in key economies during the first three quarters of the year, with the global economic forecast for 2023 reaching 2.9%. It expects robust growth to continue into 2024, with a projected growth rate of 2.6%.
In terms of country-specific growth, OPEC said the US is expected to play a leading role, accounting for around 44% of the total, followed by Canada, Guyana, Brazil, Norway, and Kazakhstan.
The report also highlights non-OPEC upstream sector investment, which is expected to reach approximately $487 billion in 2023, representing an 11% year-on-year increase.
However, analyst say this investment is projected to slightly decrease to around $482 billion in 2024.
The report that OPEC hopes to maintain a cautious but optimistic view regarding the fundamental factors influencing oil supply and demand, amid uncertainties in the global oil market.