OPEC revises demand growth forecast downwards again

The Organization of the Petroleum Exporting Countries (OPEC) revised downwards again yesterday its forecast for growth in global oil demand, due to the impact of the war in Ukraine and restrictions linked to the pandemic. The cartel now expects crude demand growth this year of 3.4 million barrels per day (mb/d), down 0.3 mb/d from its April projection, due to “potential declines in global GDP and the resurgence of the Omicron variant in China”. In April, OPEC had already lowered its forecast by 0.5 million barrels per day compared to March.

“Oil demand growth in the second quarter is expected to be slower at 2.8 mb/d, compared to 5.2 mb/d in the first quarter,” the organization said in its monthly report. Over the year, OPEC thus expects global demand of 100.3 million barrels of crude oil per day, i.e. 100,000 more than in 2019. “In the first quarter, global oil demand recorded solid growth, mainly thanks to a strong economic rebound encouraged by economic support programs and the easing of health restrictions, ”explains OPEC. The downward revision in demand for the rest of the year is mainly explained by “the current economic forecasts”, she continues. OPEC expects global economic growth of 3.5% in 2022, compared to 3.9% last month.

In particular, it invites us to “closely monitor” the impact of geopolitical tensions and the pandemic on the economy, as well as the rise in inflation or even “worsening of the problems in the supply chains”.

Production in OPEC countries increased by 153,000 barrels per day in April, according to secondary (indirect) sources cited in the monthly report. Over the year, supply should be driven by the United States, Canada, Brazil, Kazakhstan, Guyana and Norway, OPEC estimates.