World GDP growth in 2024 is forecast at 2.5%, slightly below this year’s expected growth level of 2.6%. Key oil-consuming countries, including China and India, along with some other developing economies in Asia, will continue their healthy growth levels and be responsible for around half of next year’s global economic growth. This is under the assumptions that general inflation will continue retraction in 2H23 and 2024. Tight monetary policies are also assumed to continue and key policy rates to peak by the end of 2023. Moreover, central banks are expected to engage in more accommodative monetary policies by 2H24. The services sector is expected to remain the main global economic growth driver for the remainder of 2023, with a normalization of the growth dynamic expected in 2024, when industrial production picks up again. In the OECD, GDP growth is expected at 0.9% in 2024, down from 1.1% in 2023. In the non-OECD, 2024 GDP growth is forecast at 3.9%, the same level as in 2023. Numerous uncertainties remain, to include high inflation, monetary tightening and high global debt levels.

Global oil demand in 2024 is set to grow y-o-y by a healthy 2.2 mb/d, on the back of a continued rebound in Chinese economic activity, and firm growth in other non-OECD countries. Within the regions, OECD oil demand is forecast to rise y-o-y by 0.26 mb/d, while non-OECD oil demand is projected to show a considerable increase of nearly 2.0 mb/d, mostly in China and India, and supported by incremental demand in other regions. In terms of oil products, transportation fuels – including jet fuel and gasoline – are expected to drive oil demand growth in 2024, with air travel expected to see a further recovery and expansion. Gasoline requirements will continue to see support from steadily rising road mobility in major consuming countries, such as China, India and the US. Both on-road diesel, including trucking, as well as healthy industrial, construction and agricultural activities in non-OECD countries are expected to support diesel demand. Light distillates are projected to be supported by capacity additions, and petrochemical margins in non-OECD countries are expected to remain healthy.

Non-OPEC oil supply is forecast to grow y-o-y by 1.4 mb/d in 2024, supported by healthy demand and upstream investment. Upstream capex investment in non-OPEC countries is expected at around $480 billion, roughly the same level as 2023 and 9% more than in 2022. US liquids production growth in 2024 is forecast at 0.7 mb/d, mainly from Permian crude and non-conventional NGLs, as well as from the Gulf of Mexico. Oil production in Canada, Guyana, Brazil, Norway, Kazakhstan, and Argentina is forecast to increase through new field start-ups, ramp-ups or the optimization of existing projects.

The continued commitment of the countries participating in the Declaration of Cooperation (DoC) and the successful approach of being precautious, proactive and pre-emptive and the carefully devised production adjustments have added a considerable measure of stability to global oil market, based on which the solid oil market fundamentals seen this year are expected to extend into 2024.

Source: OPEC