OPEC has again lowered its forecast for global oil demand. Last Minute WORLD, CURRENT headlines and events
The Organization of the Petroleum Exporting Countries (OPEC) has lowered its 2022 global oil demand growth forecast for the fifth time since April, citing growing economic concerns such as high inflation and rising interest rates.
According to OPEC’s monthly report, oil demand will rise by 2,550,000 bpd, or 2.6 percent, in 2022, down 100,000 bpd from the previous forecast.
“The global economy has entered a period of significant uncertainty and mounting difficulties in the fourth quarter of 2022,” OPEC said in a report.
“Downside risks include high inflation, monetary tightening by major central banks, high debt levels of countries in many regions, tightening labor markets and continued supply chain restrictions,” the statement said.
This report is the last report before the meeting of OPEC and its allies, known as OPEC+, which will take place on December 4th. The de facto leader of the OPEC+ group, Saudi Arabia’s energy minister, reportedly said the group, which recently lowered its production targets, would remain cautious.
Next year, OPEC expects an increase in oil demand by 2 million 240 thousand barrels per day. This is 100,000 bpd below the previous estimate.
Despite comments about the escalation of problems, OPEC left its forecasts for global economic growth for 2022 and 2023 unchanged, noting that the risks are reduced, but there is also upside potential.
“It can come from different sources. Any solution to the geopolitical situation in Eastern Europe could have a positive impact on inflation, mainly due to a less aggressive monetary policy,” OPEC said.
Oil, which continued to decline after the publication of the report, is trading at $95 per barrel.
In October, as oil prices fell on recession fears, the group cut its OPEC+ production target by 100,000 bpd, and more since November.
Saudi Arabia said the latest cut was necessary in response to rising interest rates in the West and a weakening global economy. US President Joe Biden criticized the decision, calling it “parochial.”
In today’s report, OPEC announced that world oil supply, which had a deficit of 300,000 bpd in the first quarter, exceeded total oil demand by 200,000 bpd in the second quarter of this year and by 1,100,000 bpd. per day in the third quarter.
OPEC said its production fell by 210,000 bpd in October to 29,490,000 bpd. This is more than OPEC + promised: Saudi Arabia cuts production by 149,000 barrels per day. These data are said to have been compiled by OPEC using secondary sources.
But Saudi Arabia, which told OPEC of a smaller production cut of 84,000 bpd, cut production in October below 11 million bpd.
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