Producer group likely to watch US president-elect’s plans to impose sanctions against Iran and Venezuela, say analysts

OPEC cut oil demand growth forecasts for this year and next for a fifth straight month, making its deepest reduction to the 2024 outlook so far after agreeing to extend its supply curbs.

OPEC cut its forecasts for oil demand growth this year and next on Wednesday, highlighting weakness in China, India and other regions in the producer group's fifth consecutive downward revision.

The OPEC+ group extends production cuts until 2026, with gradual increases and extended compensation period. Analysts view this as cautious market management.

Oil prices have been under pressure from high interest rates, a strong dollar, and high U.S. oil production. OPEC could extend oil production cuts to support prices.

The OPEC oil cartel and its allies are expected Thursday to extend their supply cuts to avoid a sharp drop in prices in a global market awash in crude.

The Organization of Petroleum Exporting Countries chopped projections for consumption growth in 2024 by 210,000 barrels a day to 1.6 million barrels a day, according to its monthly report. The cartel has slashed projections by 27% since July as it belatedly recognizes the deteriorating market picture.

The International Energy Agency lifted next year’s oil-demand estimates citing the impact of China’s stimulus measures, but said the pace of growth is expected to remain subdued. The Paris-based organization now forecasts global demand to grow by 1.

Global oil demand is expected to rise by 1.61 million barrels per day in 2024, a slight downwards revision from last month’s forecast of 1.82 million bpd, according to the latest figures released in Opec’s monthly oil market report on Wednesday.

Oil prices continued its steady move higher on Wednesday, up around 1.27% at the time of writing. This is a slight surprise given that OPEC downgraded its 2024 and 2025 forecasts.