OPEC lowers forecast for global oil demand

OPEC has revised its forecast for global oil demand, lowering it to 104.8 million barrels per day by 2024. The organization cited tough market conditions and signs of stress in the world's economy as key reasons for this adjustment. The Secretary-General of OPEC, Mohammed Barkindo, sat down with CNBC's Joumanna Bercetche to delve into the details of this revision and shed light on the future outlook of oil. According to Barkindo, the medium-term projections indicate a continuous surge in non-OPEC supply, primarily led by tight oil production in the United States, as well as other countries such as Canada, Brazil, Norway, and Kazakhstan. However, there are concerns about the deceleration of growth in the U.S., particularly in the shale patch, due to various headwinds faced by the industry. Despite this, Barkindo emphasized that in the long term, the world will still rely on conventional oil plays, with OPEC member countries continuing to be major producers due to their large reserves and cost-efficient production methods. Reflecting on the challenges faced in 2014, Barkindo highlighted the establishment of mechanisms for cooperation among oil-producing nations, aimed at ensuring market stability and addressing economic cycles. This cooperation has been in place since January 2017 and has yielded significant success. Barkindo reiterated OPEC's commitment to serving as a reliable and dependable supplier of crude oil and liquid products in the years to come. When discussing OPEC's engagement with the Paris Agreement and global efforts to address climate change, Barkindo affirmed that member countries are fully committed to the agreement and are actively implementing measures to meet their obligations. Despite growing activism around climate issues and the pursuit of alternative energy sources, Barkindo projected that oil will continue to play a significant role in meeting global energy demand, although the landscape may shift towards increased use of natural gas in the future. In response to questions about the state of the global economy and oil market dynamics, Barkindo clarified that while discussions about potential oil production cuts will take place at the upcoming OPEC meeting in December, it is premature to speculate on specific actions. He underscored the importance of ongoing dialogue and information-sharing among OPEC and non-OPEC stakeholders to maintain market stability. Barkindo emphasized that the outlook for 2020 is gradually improving, with a focus on collaborative efforts to ensure a balanced and sustainable oil market. While acknowledging challenges and uncertainties, Barkindo expressed confidence in OPEC's ability to navigate changing dynamics and meet global energy demand effectively. As the world evolves towards a more diversified energy landscape, OPEC remains dedicated to adapting its strategies and fostering cooperation among oil-producing nations.