OPEC has lowered its global oil demand forecasts for the coming years. By 2026, the world oil demand is expected to average 106.3 million barrels per day (bpd), down from last year’s estimate of 108 million bpd. The forecast for 2029 is now set at 111.6 million bpd, which is a decrease of 700,000 bpd compared to last year. However, OPEC expects the demand for 2030 to remain steady at 113.3 million bpd, unchanged from previous predictions. In contrast, the International Energy Agency (IEA) believes global demand will peak at 105.6 million bpd by 2029, and then decline. OPEC’s forecasts tend to be more optimistic, reflecting a trend of frequent downward revisions since last year. OPEC points to China’s slower demand growth as a reason for these changes but insists that peak oil demand is not expected soon.

Future Oil Demand Projections

Looking further into the future, OPEC forecasts that world oil demand will grow to 122.9 million bpd by 2050, which is higher than many industry estimates. For comparison, BP has a different outlook regarding future oil demand levels. OPEC’s downward revisions signal a shift in how member states see consumption trends through the late 2020s. Changing the 2026 expectation from 108 million bpd to 106.3 million bpd suggests that producers are starting to recognize slowing demand growth, even if they remain optimistic about long-term consumption. For those managing price risks, the differing views of OPEC and the IEA are essential when making decisions based on future demand. The IEA’s more cautious position, with a peak demand of 105.6 million bpd, indicates that global oil use might start to decline before full energy transition goals are achieved. Interestingly, OPEC has kept its 2030 demand forecast unchanged at 113.3 million bpd, despite the downward adjustments for earlier years. This steady figure suggests that OPEC believes current demand slowdowns are temporary and not due to long-term changes in behavior. They attribute slowing oil demand primarily to China, indicating they see this decline as cyclical.

Market Reaction and Strategies

The consistency in the 2030 forecast may provide some guidance for market stability. For derivatives traders, this reinforces the idea that while short-term demand might dip, opportunities in the long term—especially related to supply constraints or geopolitical events—can still support the market. This suggests possible volatility around medium-term contracts as short-term expectations tighten but may widen again after 2028. Hedging strategies that focus only on short-term markets might need reassessment. By maintaining the 2050 forecast at 122.9 million bpd, OPEC is signaling confidence that oil demand will continue to rise, albeit in different areas and sectors. This forecast is much higher than BP’s, indicating a difference in views on future industrial policies, mobility, petrochemical growth, and efficiency improvements outside OECD countries. There is also an underlying confidence in emerging economies, particularly in Asia and the Global South, to keep increasing energy usage, regardless of how quickly electrification or efficiency technologies are adopted. This suggests a need to adjust strategies towards supply narratives in those regions, possibly using calendar spreads or trades that reflect changing consumption patterns. With these revisions coming before the year’s end, shifts in open interest towards deferred contracts might happen sooner than expected. If inventory levels remain stable, short-term volatility might not increase right away. However, longer-term options could start to reflect more distinct curves that are now less linear than before. Ultimately, these changes need proactive responses rather than passive observation. Updating models to reflect lower demand growth in the next 3 to 5 years, while still investing in longer-term growth potential, can help remain adaptable without overcommitting resources. Create your live VT Markets account and start trading now.

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