OPEC Holds Firm: Global Oil Demand Forecasts Intact as Economy Looks Resilient

Oil market steadies amid upbeat OPEC outlook and steady demand despite surplus risks

OPEC stuck to its high global oil demand growth projections for 2025 and 2026 in its latest monthly report, saying the global economy continues to perform well going into the second half of 2025. Even as OPEC+ plans to raise output quotas from October, producers are watching supply dynamics and demand closely.

OPEC’s Demand & Supply Outlook

• According to OPEC, global economic growth in the first half of 2025 has remained robust, and this strength has carried into the second half.
• In August, OPEC+ increased crude oil output by about 509,000 barrels per day, reflecting earlier decisions to raise quotas.
• The group decided not to lower oil demand forecasts despite concerns over surplus risks and potential demand slack.

Why OPEC Is Staying the Course

OPEC’s decision to maintain its demand forecast reflects confidence in resilient industrial activity, continued consumption from major economies including Asia, and supportive energy policies in several consuming nations. Saudi Arabia, in particular, is pushing to regain market share through higher output quotas.

While OPEC+’s raising of output from October aims to capture more market, there is an undercurrent of caution: surplus supply, shipping constraints, and demand uncertainties (especially in transportation fuels) remain live risks.

Impacts on Markets

• Oil Prices: Prices are likely to remain supported in the near term. The maintained demand outlook offsets fears of oversupply, though the increased output could moderate price gains.
• Energy Stocks & Producers: Companies in exploration & production (E&P) and refiners may benefit, as stable demand forecasts reduce risk premium. This could lead to sector outperformance.
• Inflation & Consumer Costs: Persistent oil demand can feed into energy prices, which may translate into higher fuel and transport costs, putting upward pressure on inflation in many economies.
• Monetary Policy Considerations: Central banks that are battling inflation may find themselves with less room to ease if energy prices remain elevated. A strong oil price backdrop complicates expectations of interest rate cuts or dovish pivots.

What to Watch Going Forward

• How OPEC+ members implement the expanded quotas, and whether actual output matches announced increases.
• Inventories and storage levels globally, especially in strategic reserves, to gauge surplus build-up.
• Demand from key consumer markets like China, India, and emerging economies, particularly in transport and industry sectors.
• Geopolitical risks (e.g. supply disruptions, sanctions, shipping lane issues) that could quickly tighten the market.

In summary, OPEC’s decision to keep its demand forecasts intact underscores its belief in sustained global economic strength. Markets are likely to stay focused on how the dual forces of raised output and steady demand will shape price action, inflation, and monetary policy in the months ahead. The core theme: as oil demand remains resilient, supply decisions and global energy policy will play increasingly critical roles in financial market stability.