In a recent development, OPEC, which includes the Organization of the Petroleum Exporting Countries and its allies, has revised its global oil demand growth forecast for 2024 for the second consecutive month. The updated outlook is based on data received this year, indicating a slower pace of demand growth in the coming year.

According to OPEC's monthly report, the projected rise in global oil demand for 2024 has been reduced to 2.03 million barrels per day (bpd), down from the previous forecast of 2.11 million bpd. The main cause of this downgrade is attributed to China, where demand growth is now expected to reach 650,000 bpd in 2024, compared to the earlier estimate of 700,000 bpd.

OPEC has highlighted China's economic challenges and its shift towards cleaner energy sources as factors influencing the reduced demand for oil. While China's economic growth is still expected to remain supported, the struggling real estate sector and the increasing usage of LNG trucks and electric vehicles could potentially impact the demand for diesel and gasoline.

Furthermore, OPEC has also revised its global oil demand growth estimate for 2025, trimming it to 1.74 million bpd from the previous forecast of 1.78 million bpd.

The downward adjustments to the forecast showcase the ongoing challenge faced by OPEC+ in managing the oil market. The recent decision to delay plans of increasing oil production after prices hit their lowest point in 2024 indicates the cautious approach taken by OPEC+ in response to the volatile market conditions.

Morgan Stanley analysts have also expressed concerns over the global oil market, stating that it is experiencing a period of demand weakness. They have subsequently adjusted their Brent crude oil forecasts for the upcoming quarters.

As the outlook for the oil market remains uncertain, investors are becoming increasingly cautious, with concerns about valuations and uncertain investment opportunities. To navigate these challenging times, investors are advised to explore proven portfolios that offer high-potential opportunities.

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