OPEC Expects 'Robust' Oil Demand in 2025

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Bloomberg Jan 17 22:41 · 8507 Views

The Organization of Petroleum Exporting Countries has released the group’s first detailed assessment of 2025, and forecast that global oil demand will continue to increase strongly and exceed growth in supplies. Su Keenan reports on Bloomberg Television.

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Transcript

  • 00:00 China could be a big contributor when it comes to those
  • 00:02 to that demand outlook.
  • 00:04 Yeah, definitely OPEC looking to China, which is traditionally one of the biggest consumers of oil to drive this robust surge they see for 2025 in global consumption.
  • 00:15 They believe China together with
  • 00:18 a recovery from the
  • 00:21 global economy will result in an increase by 1.8 million barrels a day.
  • 00:27 Again, this is for next year.
  • 00:29 It sees rival supplies, and that's a reference to production from the
  • 00:32 US and not OPEC members,
  • 00:34 as expanding by 1.3 million barrels a day next year.
  • 00:39 And whether this bullish outlook will be borne out remains unclear.
  • 00:42 But it means that oil markets are set to remain in deficit through the end of 2025.
  • 00:48 And that is unless Saudi Arabia and its allies, which launched new production curbs this month,
  • 00:54 decide to boost output significantly.
  • 00:57 Now, OPEC issued the forecast in its Monthly Markets Report a bit earlier than normal,
  • 01:02 and also on the very same day that its top official published A rebuttal to predictions that oil demand is heading toward a peak.
  • 01:10 This was an effort by the OPEC Secretary General to push back against expectations
  • 01:15 that climate change is going to cap the use of fossil fuels.
  • 01:18 As for this year, 2024, OPEC expects global oil demand to increase by two and a quarter million barrels a day to a record 104.36 million a day.
  • 01:28 And that's unchanged from the forecast in last month's report,
  • 01:32 OPEC.
  • 01:33 Plus, that's the 22 nation coalition set to hold an online monitoring meeting on February 1st.
  • 01:40 Heidi,
  • 01:43 New York traded futures, so
  • 01:44 that was quite a bumpy ride that we saw in the latest
  • 01:47 session.
  • 01:47 What are we hearing about sentiments?
  • 01:50 Well, analysts are saying that despite the broader risk off sentiment, we also have the stronger dollar which is generally bearish for oil.
  • 01:58 We did see Rocky trading in New York for West TX, new Media, but ending higher for Brent.
  • 02:04 We saw
  • 02:04 our futures end a bit lower.
  • 02:07 What's going on here?
  • 02:08 Well, Wti's prom spread, which is a critical gauge for supply and demand, settled in a bullish structure known as backwardization.
  • 02:16 We haven't seen that since November.
  • 02:18 Of course you have geopolitical risk.
  • 02:20 They're playing an elevated role, particularly with ongoing developments in the Red Sea.
  • 02:25 And concerns linger that the Israel Hamas war could spread beyond Gaza
  • 02:29 later on.
  • 02:29 The fact we've got frigid weather here in the
  • 02:32 US
  • 02:33 and it's not just cold here in New York with the dusting of snow,
  • 02:37 but on the West Coast and in the Northwest, you've got states such as Texas and North Dakota
  • 02:43 where we're seeing an interruption in the state's refineries and oil processing.
  • 02:47 More than half of North Dakota's oil production is now offline.
  • 02:50 We're talking as much as 700,000 barrels a day.
  • 02:53 A top energy trader at CIBC private
  • 02:57 Market says the weather,
  • 03:00 the weather, the latest geopolitical issues may incite short covering is one thing, but she thinks it only provides a short term buffer to oil, which is an otherwise in a weak fundamental environment.
  • 03:12 Which means she believes, and many others do, the general direction of oil is lower.