The “Monthly OPEC Oil Market Report” issued last week explained the trends and reasons for fluctuations in the prices of crude oil and petroleum products in light of the global “stagflation” phenomenon, the re-spread of the Corona pandemic globally, and the continuation of the Ukrainian war unabated since the end of last February. And the US-Chinese convulsions in light of the US House Speaker’s visit to Taiwan.
According to OPEC, the fundamental factors in the oil markets continued to recover to their pre-pandemic level during the first half of 2022. However, despite this recovery, indications of a slowdown in global economic growth, including some oil countries, appeared at the same time. itself. What left its mark on the oil markets was also the relative decline in investments in the oil production sector due to legislation to zero emissions by 2050, which led to the limited possibility of increasing production from non-OPEC oil-producing countries.
As a result of these fluctuations, the prices of the “OPEC” basket decreased by 9.17 dollars per barrel, or 7.8 percent, in July, compared to June, to record the average price of the basket during the month of July of 108.55 dollars per barrel.
At the same time, global economic growth indicators decreased by 3.1 percent for the years 2022 and 2023. The reasons for this are attributed to the decline in the US national income product during the second quarter of 2022. The US national income has decreased by 1.8 percent during the past months of 2022. It is expected to continue its decline to 1.7 percent in 2023. The growth of the economy of the European Common Market is expected for 2022. About 3.2 percent, while expectations for a decrease in this rate for European market countries for the year 2023 are about 1.6 percent.
The global demand for oil during 2022 recorded a moderate increase of 3.1 million barrels per day, which increased the global demand rate to about 100 million barrels per day. Forecasts for the year 2023 indicate that the demand for oil will continue to rise by about 2.7 million barrels per day, to record a rise in global demand for oil by 102.7 million barrels per day.
To determine the scene of global oil consumption, the OPEC report states that, in general, negative factors dominate the 2023 outlook, due to geopolitical conflicts, the continuation of the pandemic, increasing inflation rates, and high sovereign debt rates in multiple countries.
Walid Khadduri
An Iraqi writer specializing in energy affairs