OPEC lowers its forecast for oil demand growth in 2022 and 2023 due to slowing economy and inflation

LONDON – Archyde.com: The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday cut its forecast for global oil demand growth for 2022 for the fourth time since April, and also cut numbers for next year, due to slowing economies, the return of measures to contain the Corona virus in China and high inflation.
The organization said in a monthly report that oil demand will rise by 2.64 million barrels per day, or 2.7 percent, in 2022, down 460,000 barrels per day from previous expectations. Expectations of lower demand give an additional context to the movement of the organization and its allies last week, in the group known as “OPEC +”, to make the largest production cut since 2020 to support the market. The United States criticized the decision and hinted that it might reconsider its relations with Saudi Arabia, which it considers the leader of the latest “OPEC +” move. OPEC said in the report, “The global economy has entered a period of increasing uncertainty and increasing challenges, amid persistently high levels of inflation, monetary policy tightening (interest hikes) by major central banks, and high sovereign debt levels in many regions, as well as financial problems. Continuous supplies.
It lowered its forecast for global economic growth in 2022 to 2.7 percent from 3.1 percent, and also lowered its forecast for next year to 2.5 percent, and said there is likely to be a further decline. “The main downside risks remain,” she added, noting that there is a limited potential for an upside due to factors such as fiscal measures in the European Union and China and any solution to the conflict in Ukraine.
The organization expects that demand for oil will rise next year by 2.34 million barrels per day, which is 360,000 barrels per day less than previous expectations.
For most of this year, OPEC+ has worked to increase oil production to get rid of record cuts that were put in place in 2020 following the Covid-19 pandemic slashed demand.
Its decision in September 2022 called for an increase of 100,000 barrels per day in the group’s production target, of which regarding 64,000 barrels per day were supposed to come from the ten member states of the Organization of the Petroleum Exporting Countries.
The report showed that OPEC production rose by 146,000 barrels per day to 29.77 million barrels in September, led by Saudi Arabia and Nigeria.
However, it is pumping much less than called for by the “OPEC +” agreement due to the lack of investment in oil fields by some members.