OPEC Cuts Demand Forecast Amid Rising Brent Price

OPEC has downgraded its global oil demand growth estimate for 2026 to 580,000 barrels per day, marking the fourth consecutive cut. This reduction in forecast is largely attributed to China and India, with OPEC cutting its Chinese demand forecast by 110,000 barrels per day and Indian forecast by 60,000 barrels per day. The main reasons behind this downward revision are slower-than-expected recovery in manufacturing, accelerating electric vehicle adoption, and a property-sector contraction that has suppressed diesel demand in construction and freight.

The International Energy Agency (IEA) also projects global oil demand to fall by 1 million barrels per day to 103.5 million barrels per day in 2026. This is not a growth slowdown but an outright demand contraction, attributed to sustained high prices and supply-side disruption from the US-Iran conflict.

The Brent price has remained above $90 for most of the past three weeks, despite these downward revisions from energy agencies. The current market structure suggests that physical buyers are still willing to pay up for immediate barrels due to tight supply conditions.