OPEC stated on Wednesday that robust economic growth and high air travel will sustain fuel usage in the summer, sticking to its projection of reasonably strong rise in world oil demand in 2024 and the following year.

According to a monthly report by the Organisation of the Petroleum Exporting Countries, there will be a 2.25 million barrels per day (bpd) increase in global oil consumption in 2024 and a 1.85 million bpd increase in 2025. The two predictions from last month remained the same.

“Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is anticipated to bolster demand for transport fuels and drive growth in the United States,” the study from OPEC stated.

Because of divergent opinions on how quickly the globe should switch to cleaner fuels, forecasters are less united than normal when it comes to the strength of the increase in oil demand. BP stated earlier on Wednesday that the demand for oil will peak in 2019.

Since late 2022, OPEC+—a coalition of OPEC and partners including Russia—has reduced output on a number of occasions in an effort to stabilise the market. On June 2, the group decided to extend the most recent cut of 2.2 million barrels per day through the end of September and then phase it out gradually starting in October.

In addition, OPEC increased its prediction for global economic growth this year from 2.8% to 2.9% and indicated that there was room for expansion, noting the Organisation for Economic Cooperation and Development’s momentum this year outside of industrialised nations.

After four weeks of advances, oil prices reversed direction on Monday as concerns about a tighter supply were allayed by prospects of a ceasefire agreement in Gaza.

“In the first half, the major economies’ economic growth momentum stayed strong. This pattern is consistent with a near-term positive growth trajectory overall, according to OPEC.

Following the release of the OPEC report, oil prices remained stable, with Brent crude trading below $85 per barrel.

(Adapted from BusinessTimes.com.sg)