by Alex Lawler

LONDON (Reuters) – The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday cut its forecast for global oil demand growth in 2024 and 2025 for the second time in a row, to take into account data received since the start of the year.

The weakening outlook highlights the challenge facing OPEC+ – which includes OPEC members and their allies such as Russia – in balancing the market.

Last week, the group postponed plans to increase oil production after prices fell to their lowest level in 2024.

In its monthly report released on Tuesday, OPEC said global oil demand would rise by 2.03 million barrels per day (bpd) in 2024, compared with a forecast of 2.11 million bpd last month.

The downward revision is linked in particular to a sharp reduction in demand in China, with OPEC cutting its forecast for the country from 700,000 bpd to 650,000 bpd in 2024. Oil consumption in the world’s second-largest economy faces headwinds due to economic challenges and the adoption of cleaner fuels, OPEC said.

“Looking ahead, China’s economic growth is expected to remain well supported,” OPEC said in the report.

“However, headwinds in the real estate sector and the increasing penetration of LNG (liquefied natural gas) trucks and electric vehicles are likely to weigh on demand for diesel and gasoline.”

Oil continued to decline after the report, with Brent trading below $71 a barrel, near its lowest price since March 2023.

Forecasters are more divided on the strength of oil demand growth in 2024, particularly because of differences over China and, more broadly, the pace of the global shift to cleaner fuels. Despite the cut, OPEC’s forecast is at the high end of industry estimates.

OPEC also lowered its estimate of global demand growth in 2025 to 1.74 million bpd from 1.78 million bpd.

(Reporting by Alex Lawler; Editing by Kate Entringer; Editing by Dagmarah Mackos)

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