© Archyde.com. OPEC keeps 2023 oil demand forecast unchanged, ‘cautiously optimistic’ on global economy
News from the Financial Associated Press on January 18 (edited by Niu Zhanlin)On Tuesday local time, OPEC said that China’s oil demand will rebound this year and will promote global economic growth. And the organization is “cautiously optimistic” regarding the outlook for the world economy in 2023.
OPEC pointed out in its latest monthly report that it maintains its forecast for the growth of global oil demand in 2023. The expected growth rate is still 2.2 million barrels per day, and the total demand reaches 101.77 million barrels per day, which is the same as last month’s forecast.
The monthly report shows that demand in OECD member countries is expected to grow by 300,000 barrels per day, and non-OECD countries are expected to grow by 1.9 million barrels per day. As a result, global oil demand is expected to remain at 101.77 million barrels per day in 2023, compared with 99.55 million barrels per day in 2022, the group forecast.
Uncertainties remain in current forecasts, including global economic developments, changes in COVID-19 policies and geopolitical tensions, OPEC added.
However, if a stronger economy materializes, it might lead to an upward revision in demand and support oil prices. Global economic momentum appears to be stronger in the fourth quarter of 2022 than previously expected, potentially providing a solid foundation for 2023.
OPEC’s monthly report mentioned that China’s oil demand will rebound, and China’s oil demand is expected to grow by 510,000 barrels per day in 2023.
OPEC said that the global economic growth forecast for 2023 is 2.5%, which is in line with previous expectations, but it raised the global economic growth forecast for 2022 to 3%.
In addition to the benefits brought by China, the Federal Reserve’s soft landing of the US economy and further weakening of commodity prices are sources of economic upturn. Downside risks include higher-than-expected inflation, which might prompt major central banks to tighten monetary policy further.
OPEC Secretary-General Haitham Al-Ghais told the World Economic Forum in Davos earlier on Tuesday that the group was seeing good signs of demand from China as tourism and economic activity resumed. However, he warned that a slowdown in advanced economies and persistent inflation clouded the outlook.
Analysts expect OPEC and the wider OPEC+ group to take action to defend prices if the recession drags on prices further.