According to data, analysts, and industry sources, global oil demand growth must quicken in the coming months, or the market would struggle to absorb OPEC+’s October oil supply rise.
Even before increased fears of a U.S. recession caused a worldwide market and bond sell-off this week, oil demand growth from top consumers in the US and China had fallen short.
Oil demand growth may decelerate if the economy slows. Analysts suggested OPEC+ will have to delay oil production or accept lower pricing for greater supplies.
“In current circumstances of significant risk of recession, it is unlikely OPEC+ would move forward with the planned October increases,” said longtime OPEC-watcher Gary Ross, CEO of Black Gold Investors.

Oil fell below $80 per barrel in August, which is less than most OPEC+ members and allies like Russia require to balance their budgets.
“Oil demand definitely has a downside risk,” said Neil Atkinson, an independent economist who worked at the International Energy Agency, citing Chinese and U.S. economic concerns.

“It’s very difficult to see how prices can rise significantly if demand is slower than we thought,” he said, expecting OPEC+ to suspend its supply increase.
On Wednesday, government data revealed China’s oil imports fell 2.4% to 10.89 million barrels per day in the first seven months of 2024.
Chinese diesel use is falling as LNG-powered trucks become more popular, and the economy is slow due to a property crisis.

The world’s most recognized oil demand analysts at OPEC and the IEA evaluate demand differently than before, making it hard to predict if global demand will rise enough to absorb additional supplies this year.
Oil consumption data is delayed and often changed. Forecasters include best estimates in some demand data.
OPEC expects first-half 2024 world demand growth at 2.15 million bpd, while the IEA estimates 735,000. The IEA assists industrialized nations on energy policy.
OPEC’s first-half demand growth prediction remains unchanged from the start of the year. IEA lowers first-half demand growth prediction from 1.19 million bpd in January.
OPEC says China’s second-quarter consumption climbed by nearly 800,000 bpd, while the IEA estimates it declined. China is a major factor in the full-year and first-half outlooks.