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OPEC Sticks to 2024 Oil Demand View, Sees Strong Travel Season

File photo: A person puts gas in a vehicle at a gas station in Manhattan, New York City, US, August 11, 2022. REUTERS/Andrew Kelly/File photo Purchase Licensing Rights
File photo: A person puts gas in a vehicle at a gas station in Manhattan, New York City, US, August 11, 2022. REUTERS/Andrew Kelly/File photo Purchase Licensing Rights
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OPEC Sticks to 2024 Oil Demand View, Sees Strong Travel Season

File photo: A person puts gas in a vehicle at a gas station in Manhattan, New York City, US, August 11, 2022. REUTERS/Andrew Kelly/File photo Purchase Licensing Rights
File photo: A person puts gas in a vehicle at a gas station in Manhattan, New York City, US, August 11, 2022. REUTERS/Andrew Kelly/File photo Purchase Licensing Rights

OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and next year, saying on Wednesday that resilient economic growth and air travel would support fuel use in the summer months.

The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand would rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

"Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is anticipated to bolster demand for transportation fuels and drive growth in the United States," OPEC said in the report.

OPEC+, which groups OPEC and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million bpd until the end of September and gradually phase it out from October.

OPEC also raised its forecast for world economic growth this year to 2.9% from 2.8%, and said there was potential upside to that number, citing momentum outside developed countries in the Organization for Economic Cooperation and Development.

Oil prices edged lower on Monday, reversing course after four weeks of gains, as hopes of a ceasefire deal in Gaza eased worries of tightening supply.

"Economic growth momentum in major economies remained resilient in the first half. This trend supports an overall positive growth trajectory in the near term," OPEC said, Reuters reported.

Oil was steady after the OPEC report was released, with Brent crude trading below $85 a barrel.

OPEC's forecasts are at the high end of what the industry expects and while it has not forecast a timeline for when demand will peak, BP expects it to do so next year in both of the two main scenarios in its annual Energy Outlook, published on Wednesday.

The International Energy Agency, which represents industrialized countries, expects much lower 2024 demand growth than OPEC, of 960,000 bpd, and is scheduled to provide an update on its view on Thursday.

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Draghi Urges Reform, Investment Drive to Revive Lagging EU

Italian former prime minister and economist Mario Draghi speaks during a press conference about the future of European competitiveness at the EU headquarters in Brussels on September 9, 2024. (Photo by Nicolas TUCAT / AFP)
Italian former prime minister and economist Mario Draghi speaks during a press conference about the future of European competitiveness at the EU headquarters in Brussels on September 9, 2024. (Photo by Nicolas TUCAT / AFP)
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Draghi Urges Reform, Investment Drive to Revive Lagging EU

Italian former prime minister and economist Mario Draghi speaks during a press conference about the future of European competitiveness at the EU headquarters in Brussels on September 9, 2024. (Photo by Nicolas TUCAT / AFP)
Italian former prime minister and economist Mario Draghi speaks during a press conference about the future of European competitiveness at the EU headquarters in Brussels on September 9, 2024. (Photo by Nicolas TUCAT / AFP)

The European Union needs far more coordinated industrial policy, more rapid decisions and massive investment if it wants to keep pace economically with rivals the United States and China, Mario Draghi said on Monday in a long awaited report.
The European Commission asked the former European Central Bank chief and Italian prime minister a year ago to write a report on how the EU should keep its greening and more digital economy competitive at a time of increased global friction.
"Europe is the most open economy in the world so when our partners don't play according to the rules, we are more vulnerable than others," Draghi told a news conference.
In the opening section of a report set to run to some 400 pages, Draghi said the bloc needed additional investment of 750-800 billion euros ($829-884 billion) per year, up to 5% of GDP - far higher even than the 1-2% in the Marshall Plan for rebuilding Europe after World War Two.
"Growth has been slowing down for a long time in Europe, but we've ignored (it)," Reuters quoted Draghi as saying.
"Now we cannot ignore it any longer. Now conditions have changed: World trade is slowing, China is actually slowing very much and is becoming much less open to us... we've lost our main supplier of cheap energy, Russia."
EU countries had already responded to the new realities, Draghi's report said, but it added that their effectiveness was limited by a lack of coordination.
Differing levels of subsidies between countries was disturbing the single market, fragmentation limited the scale required to compete on a global level, and the EU's decision-making process was complex and sluggish.
"It will require refocusing the work of the EU on the most pressing issues, ensuring efficient policy coordination behind common goals, and using existing governance procedures in a new way that allow member states who want to move faster to do so," the report said.
It suggested so-called qualified majority voting - where an absolute majority of member states need not be in favor - should be extended to more areas, and as a last resort that like-minded nations be allowed to go it alone on some projects.
While existing national or EU funding sources will cover some of the massive investment sums needed, Draghi said new sources of common funding - which countries led by Germany have in the past been reluctant to agree to - might be required.
"If the political and institutional conditions are met, these projects would also call for common funding," the report said, citing defense and energy grid investments as examples.
EU growth had been persistently slower than that of the United States in the past two decades and China was rapidly catching up. Much of the gap was down to lower productivity.
Draghi's report comes as doubts emerge over the economic model of Germany, once the EU's motor after Volkswagen weighs its first ever plant closures there.
Draghi said the EU was struggling to cope with higher energy prices after losing access to cheap Russian gas and could no longer rely on open foreign markets.
The former central banker said the bloc needed to boost innovation and bring down energy prices while continuing to decarbonize and both reduce its dependencies on others, notably China for essential minerals, and increase defense investment.