OPEC cuts 2022, 2023 oil demand progress view as financial system slows

October 12, 2022

  • Cuts 2022 demand progress to 2.64 million bpd from 3.1 mln bpd
  • Nonetheless sees demand topping pre-pandemic stage in 2023
  • OPEC September output rises 146,000 bpd, led by Saudi

LONDON, Oct 12 (Reuters) – OPEC on Wednesday reduce its 2022 forecast for progress in world oil demand for a fourth time since April and in addition trimmed subsequent yr’s determine, citing slowing economies, the resurgence of China’s COVID-19 containment measures and excessive inflation.

Oil demand will improve by 2.64 million barrels per day (bpd) or 2.7% in 2022, the Group of the Petroleum Exporting International locations (OPEC) stated in a month-to-month report, down 460,000 bpd from the earlier forecast.

The decrease demand outlook offers extra context for final week’s transfer by OPEC and its allies, referred to as OPEC+, to make their largest reduce in output since 2020 to help the market. The USA criticized the choice.

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“The world financial system has entered right into a time of heightened uncertainty and rising challenges, amid ongoing excessive inflation ranges, financial tightening by main central banks, excessive sovereign debt ranges in lots of areas in addition to ongoing provide points,” OPEC stated within the report.

Subsequent yr, OPEC expects oil demand to rise by 2.34 million bpd, 360,000 bpd decrease than beforehand forecast, to 102.02 million bpd. OPEC nonetheless expects demand in 2023 to exceed the pre-pandemic fee of 2019.

OPEC reduce its 2022 international financial progress forecast to 2.7% from 3.1%, trimmed subsequent yr’s determine to 2.5% and stated there was potential for additional weak spot.

“Main draw back dangers nonetheless exist,” OPEC stated, including there was a restricted upside potential from such components as fiscal measures within the EU and China, and any decision to the Ukraine conflict.

OPEC+ has for many of this yr been ramping up oil output to unwind document cuts put in place in 2020 after the pandemic slashed demand.

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Their resolution for September 2022 known as for a 100,000 bpd improve within the group’s output goal, of which about 64,000 bpd was meant to come back from the ten taking part OPEC international locations.

The report confirmed OPEC output rose by 146,000 bpd to 29.77 million bpd in September, led by Saudi Arabia and Nigeria.

Nonetheless, OPEC is pumping far lower than known as for by the OPEC+ settlement as a consequence of underinvestment in oilfields by some members.

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Reporting by Alex Lawler;
Enhancing by Bernadette Baum

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