Oil Demand Outlook Remains Strong Despite Pessimistic Forecasts
Despite predictions of dwindling crude demand, the head of OPEC remains optimistic about the market’s prospects. In an interview, OPEC Secretary-General Haitham Al Ghais emphasized that the organization forecasts demand growth of 1.9 million barrels per day this year, citing independent analysts and researchers who share similar views.
A Bit Too Much Doom and Gloom
Al Ghais believes that there is excessive pessimism surrounding the demand outlook, particularly among analysts and researchers. He attributes this to the group’s revised projections, which still indicate robust demand. OPEC downwardly revised its forecasts in mid-October, predicting growth of 1.93 million barrels per day this year and 1.64 million barrels per day in 2025.
China’s Economic Trajectory
When questioned about concerns over China’s economic slowdown, Al Ghais pointed out that OPEC expects China to grow at 0.6 million barrels per day this year. He dismissed concerns about China’s growth, stating that the organization is not an outlier in its forecast.
Positive Signs in the US Economy
Al Ghais also highlighted positive signs in the US economy, particularly in the petrochemical industry and aviation sector. This optimism comes despite economists’ expectations of weak economic growth in China next year.
OPEC’s Production Cuts
The comments came just a day after OPEC+ member countries agreed to delay a planned December output increase by one month, causing crude futures to jump over 2%. Al Ghais explained that this decision was part of OPEC’s ongoing policy to ensure market stability.
Market Volatility
The oil market has experienced significant volatility in recent months, with global supply abundance and slowing Chinese demand contributing to the uncertainty. However, Al Ghais remains confident in OPEC’s ability to navigate these challenges and maintain a stable market.
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