-- The Organization of the Petroleum Exporting Countries on Monday lowered its second-quarter oil demand forecast due to the Middle East conflict, but maintained its full-year estimates amid expectations for a rebound in the second half.
The cartel sees global oil consumption at 105.1 million barrels a day in the ongoing three-month period, it said in its latest monthly market report. Last month, the organization projected demand at 105.6 million barrels per day in the second quarter.
The downgrade reflects lower estimates for both the Organization for Economic Co-operation and Development and non-OECD, "driven mainly by slight transitory weakness in oil demand growth, given ongoing developments in Middle East," OPEC said. "However, this weakness is expected to be compensated in the second half of the year."
Global consumption totaled 105.7 million barrels a day in the first quarter.
US military forces were due to begin implementing a blockade of maritime traffic entering and exiting Iranian ports at 10 am ET on Monday. The development came after US and Iranian delegations failed to reach a deal during negotiations in Pakistan over the weekend, fueling concerns about the durability of an already fragile ceasefire between the two sides.
The cartel continues to see global oil consumption increasing by 1.38 million barrels a day in 2026 and by 1.34 million barrels next year.
OPEC maintained its global economic growth estimate at 3.1% for 2026, including a 2.2% rate for the US. It still expects growth of 3.2% for the world and 2% for America next year.
OPEC expects the US economy to maintain "sound momentum" this year, driven by consumer spending, although inflation dynamics in the near term will need to be "carefully monitored." The cartel anticipates the Federal Reserve to remain on hold through the first half and potentially shift to gradual monetary policy easing in the second half, "with one or two rate cuts seen as possible."
On Friday, government data showed that US consumer inflation accelerated to its highest monthly reading in nearly four years in March as the Middle East conflict sent energy prices sharply higher.
The cartel maintained its forecast of an increase in liquids production from countries not participating in the Declaration of Cooperation, or DoC, by 630,000 barrels a day this year. The DoC is the name for OPEC+, which comprises OPEC and non-OPEC allies. Liquid production includes crude oil, condensate and natural gas liquids.
West Texas Intermediate crude oil was up 6.1% at $102.48 a barrel in midday trading, while Brent rose 6.8% to $101.67.