Reuters: OPEC said the global economy may perform better than expected in the second half of the year despite trade conflicts and refineries’ crude intake would remain elevated to meet the uptick in summer travel, helping to support the demand outlook.
In a monthly report on Tuesday, the Organisation of the Petroleum Exporting Countries left its forecasts for global oil demand growth unchanged in 2025 and 2026 after reductions in April, saying the economic outlook was robust.
“India, China, and Brazil are outperforming expectations so far, while the United States and the Eurozone are experiencing a continued rebound from last year,” OPEC said in the report.
“With this, the second-half 2025 economic growth may turn out better than currently expected.”
A solid economy shrugging off trade conflicts would make it easier for OPEC+, which groups OPEC plus Russia and other allies, to proceed with its plan to pump more barrels to regain market share after years of cuts aimed at supporting the market.
OPEC+ agreed on Jul 5 to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped, then retreated, following Israeli and US attacks on Iran.
Oil prices have not significantly fallen despite the larger than expected OPEC+ hike and US President Donald Trump’s 50-day deadline for Russia to end the Ukraine war, finding support from rising seasonal demand.
Global refinery crude intake posted a sharp increase of 2.1 million bpd in June from May as refiners returned from maintenance, a sign of a stronger oil market, OPEC said in the report, adding that throughput was likely to stay high.
“Refinery intakes globally, and particularly in the US, are expected to keep throughputs elevated to meet the seasonal uptick in transport fuel demand, especially that of gasoline, jet/kerosene and residual fuel,” OPEC said.
OPEC’s demand forecasts are at the higher end of the industry range, as the agency expects a slower energy transition than some other forecasters.
The International Energy Agency last week trimmed its demand forecasts but said the market may be tighter than it appears as refineries ramp up processing to meet summer travel demand.
Brent crude LCOc1 was steady after OPEC published the report, trading close to $69 a barrel.
OUTPUT RISING
OPEC’s report also showed that in June OPEC+ pumped 41.56 million bpd, up 349,000 bpd from May. This is slightly less than the 411,000 bpd hike called for by the group’s increase in its June quotas.
The actual hike was smaller than the headline increase in quotas partly because some nations, such as Iraq, cut output as part of a pledge to make further reductions for earlier pumping above targets.
Still, output in Kazakhstan, which is under pressure to comply with OPEC+ quotas, rose last month after slightly falling in May and remained above the country’s quota.
According to OPEC, Kazakhstan’s oil production rose by 64,000 bpd in June to 1.847 million bpd.
