- OPEC+ reduces the global oil demand forecast by 210,000 barrels per day for this year.
- By 2025, the demand forecast is further reduced by 90,000 barrels per day.
- WTI crude oil reacts with a modest increase to $69.59 per barrel following the update of the OPEC+ demand forecast.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, updated its forecast, expecting less demand for crude oil due to the ongoing economic slowdown in China, India and other regions.
OPEC+ revises demand projections downward, citing slow economic activity in China and India
OPEC’s global oil demand was revised down by 210,000 barrels per day (BPD) from 1.82 million estimated in November to 1.61 million BPD year-on-year. By 2025, demand was reduced by 90,000 BPD from the previous month’s projections of 1.5 million BPD to 1.4 million year-on-year.
OPEC noted, “The majority of this revision is done in the third quarter, taking into account the bearish data recently received for the third quarter.” The cartel added that China’s oil demand fell by 81,000 BPD year-on-year.
OPEC cut its global oil demand growth estimate for 2025 to 1.45 million bpd from 1.54 million bpd.
US crude oil, known as West Texas Intermediate (WTI), rose after the headline from around $69.00 per barrel to its daily high of $69.59.
WTI Oil FAQs
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, a group of large oil-producing countries, is another key price factor. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.
Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
