OPEC sticks to robust growth expectations ‌

It has stuck to its forecast for relatively strong growth in global oil demand in 2024 and said 2025 will see a robust increase in oil use led by China and the Middle East. These type of announcements usually come mid-year. Is it a sign that OPEC is concerned that oil demand will start to fade and OPEC feels the need to boost the market? It is a view which contrasts with other bodies. The IEA for example predicts oil demand will peak by 2030 as the world shifts to cleaner energy. The IEA executive director Fatih Birol, told Reuters on the sidelines of the World Economic Forum yesterday he expected a comfortable, more balanced oil market with a significant increase in oil output from the United States, Canada, Brazil, and Guyana this year, just as global demand growth slows.

(AI Video Summary)

Growth in China and the Middle East

OPEC recently made an announcement about the future of oil demand. They believe that the demand for oil will continue to grow strongly until 2024 and even extend into 2025. This growth will mainly be driven by China and the Middle East, where people are using more and more oil. This announcement was surprising because OPEC originally planned to give this prediction in July.

The International Energy Agency

However, the International Energy Agency (IEA) has a different view. They predict that oil demand will reach its peak by 2030 as people start to transition to cleaner energy sources. The executive director of the IEA, Fatih Birol, thinks that the oil market will become more balanced and comfortable. He believes that countries like the United States, Canada, Brazil, and Guyana will increase their oil production, which could lead to lower prices due to the combination of higher supply and slower demand growth.

Brent oil prices

Looking at the price of Brent, which is the benchmark for oil prices according to OPEC, there has been a recent downward movement indicated by Elliott Wave. However, analysts are still waiting for a breakthrough of a symmetrical triangle formation to determine the direction more clearly. If the breakthrough is upwards, it could result in a three-wave recovery and oil prices could reach as high as $8,508. On the other hand, if the breakthrough is downwards, oil prices could drop to levels not seen since March 2023, when they went above $70.

The American Petroleum Institute

Meanwhile, the American Petroleum Institute (API) reported that US crude oil inventories increased by half a million barrels last week. Gasoline stockpiles, on the other hand, decreased by 2.5 million barrels, while distillates saw an increase of 600,000 barrels.

To summarize, OPEC believes that oil demand will continue to grow strongly, but the IEA predicts a more balanced market with declining demand in the future. The future direction of oil prices is uncertain, as it depends on a breakthrough from a symmetrical triangle. Additionally, inventory data shows mixed results for crude oil, gasoline, and distillate stockpiles.