OPEC raises global oil demand growth forecast, trims supply growth projections

Global oil demand is projected to increase by 2.3 million b/d this year to 101.9 million b/d, according to OPEC's monthly oil market report. This is an upward revision of 100,000 b/d compared to its January forecast.

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"Key to oil demand growth in 2023 will be the return of China from its mandated mobility restrictions and the effect this will have on the country, the region and the world,” says the Vienna-based organisation.

However, OPEC also forecasts that global economic concerns like higher inflation, monetary tightening and geopolitical tensions will remain key headwinds for global oil demand growth.

This demand growth is split between 400,000 b/d in OECD countries and 2 million b/d in non-OECD countries. Demand is expected to average 46.5 million b/d in OECD countries and 55.4 million b/d in non-OECD.

Global oil demand is expected to rise by 1.9 million b/d in the first quarter of this year. This is 200,000 b/d higher than the January forecast.

Supply projections

Core OPEC group crude oil production averaged 28.88 million b/d in January, down 49,000 b/d on the month, the report says. Crude oil output increased mainly in Nigeria, Angola and Kuwait, and declined in Saudi Arabia and Iraq.

According to OPEC, non-OPEC liquids production will grow by 1.4 million b/d this year to average 67 million b/d. A downward revision of 100,000 b/d from the previous month's estimate is attributed to lower output expectations for Russia and the US.

This year, Russia's liquid fuel production has been reduced by 50,000 b/d from its previous estimate. It is now expected to decline by 900,000 b/d to 10.1 million b/d amid "high uncertainty."

US crude oil output is anticipated to increase by 700,000 b/d this year, to average 12.6 million b/d. This is a decline of 100,000 b/d from its January forecast.

“Looking ahead, US crude exports are likely to be dampened in the near term by unseasonably cold weather. For 2023, however, crude exports are expected to rise as US production reaches record levels, expanding the volumes available for export,” says the report.

By Konica Bhatt

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