OPEC maintains 2022, 2023 oil demand forecasts

OPEC expects oil demand to increase by 3.1 million b/d this year, and by 2.7 million b/d in 2023.

PHOTO: OPEC expects oil demand to increase by 3.1 million b/d in 2022. Getty Images

OPEC has upheld a robust demand forecast, citing signs that major economies have fared better than expected despite headwinds such as higher inflation. It expects demand to rise by 3.1 million b/d in 2022 and by 2.7 million b/d in 2023, unchanged from last month’s estimates.

OPEC expects global oil consumption to average 102.73 million b/d this year, which is higher than pre-pandemic levels.

"Oil demand in 2023 is expected to be supported by a still-solid economic performance in major consuming countries, as well as potential improvements in Covid-19 restrictions and reduced geopolitical uncertainties," OPEC says.

OPEC's sanguine demand forecast comes amid worries about a global recession and crude prices are hovering near six-month lows.

Oil market expert Vandana Hari of Vanda Insights says, “the market has moved past the Saudi energy minister and OPEC+’s jawboning - the alliance will be under scrutiny for walking the talk if Brent slips below $90. For now, it can keep its powder dry.”

She further adds, “recessionary fears and expectations of oil demand erosion are in the driver’s seat for the oil complex, by default. They are being occasionally dwarfed by supply fears, but those are not taking a firm hold.”

OPEC forecasts global economic growth for this year and 2023 at 3.1%. It, however, highlights some downward risks arising from ongoing geopolitical tensions, pandemic, supply chain issues, higher inflation rates, high levels of sovereign debts in many regions, and potential monetary tightening by the US, EU, and the UK.

By Konica Bhatt

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