downgraded organization oil exporting countries “OPEC” forecasts oil demand growth of regarding 500,000 barrels per day and 400,000 barrels per day in 2022 and 2023, respectively.
OPEC said in the organization’s monthly report issued today, Wednesday, that this reduction is due to the slowdown in the global economy, the “zero-Covid” strategy pursued by China and the economic challenges in European countries.
The organization stated that global demand for oil will rise by 2.6 million barrels per day in 2022, less than its previous estimate of 3.1 million barrels per day.
Global oil demand in 2023 will grow by 2.3 million barrels per day, down from a previous estimate of 2.7 million barrels per day.
“Geopolitical risks remain ongoing, extensions of lockdowns related to Covid-19 and pandemic outbreaks in the Northern Hemisphere during the winter season,” the organization said.
The demand for oil in the OECD countries will grow by 1.4 million barrels per day in 2022, down from the previous forecast of 1.6 million barrels per day.
The demand for crude produced by OPEC countries this year will reach 28.7 million barrels per day, or 200,000 barrels per day less than its previous estimates.
The demand for OPEC oil was revised down by 300,000 barrels per day in 2023.
OPEC also expects global economic growth of 2.7% and 2.5%, in 2022 and 2023, respectively. This downward revision compared to the organization’s previous estimate of 3.1%, each year.
The International Monetary Fund cut its growth forecast for 2023 and warned in its report on Tuesday of a cost-of-living crisis as the global economy continues to be affected by the war in Ukraine, adding to inflationary pressures and a slowdown in China.
A potential slowdown in China, the world’s largest importer of crude oil, and indications that the US Federal Reserve may announce further interest rate increases have led to a massive sell-off in oil markets this week.
Oil prices rose by regarding 10%, last week, as the OPEC + group, which includes 23 members, announced a production cut of two million barrels per day.
During a press conference following the meeting, Saudi Energy Minister Prince Abdulaziz bin Salman stressed the importance of “pre-action” to confront the state of uncertainty. He emphasized that he would continue to make the required commitments to improve the global economy.
“OPEC Plus will remain a major force for the stability of the global economy. The amount of uncertainty we are currently experiencing is unprecedented. The current situation makes it difficult for large consumers to resort to the paper market,” according to the Saudi Energy Minister.
Regarding the impact of central bank decisions on demand, Prince Abdulaziz said, “We do not know the implications of anti-inflation policies on global demand.”
