OPEC maintains forecasts for oil demand growth in 2022 and 2023

The Organization of Petroleum Exporting Countries (OPEC) states, in a monthly report published this Tuesday (13) that its projection for growth in global demand for the commodity remained at 2.5 million barrels per day (bpd) for 2022. For the following year, it remains at 2.2 million bpd.

In the current year, oil demand was revised upwards in the third quarter, driven by Organization for Economic Cooperation and Development (OECD) countries, but revised downwards in the fourth quarter, in the face of a slowdown outside the OECD and weak industrial activity in the China.

For 2023, the expectation is for growth of 300 bpd in OECD demand and 1.9 million bpd outside that group, but OPEC points out that the projection is subject to “many uncertainties” in the current framework, due to factors such as measures to contain covid-19, especially in China, and “ongoing geopolitical tensions”, with Russia’s war in Ukraine.

Demand for the group’s oil

Demand for OPEC oil in the current year was maintained from the previous month, at 28.6 million barrels per day, says the entity. The result represents an increase of around 500,000 bpd compared to the 2021 level, he compares.

OPEC also informs that the growth in demand for its oil in 2023 was also maintained, at 29.2 million bpd, that is, a growth of 600 thousand bpd compared to the expected for the current year.

Offer

On the supply side, OPEC says that growth this year in countries outside the cartel will be 1.9 million bpd, practically in line with the figure for the previous month.

The main drivers of this increase are the USA, Canada, Guyana, Russia, China and Brazil, while in Norway and Thailand there should be a decrease in production.

For 2023, the forecast is that the growth in production outside of OPEC will be 1.5 million bpd, with the advance driven by the USA, Norway, Brazil, Canada, Kazakhstan and Guyana, but a drop in production in Russia and Mexico.

OPEC also sees great uncertainty about the geopolitical situation in Eastern Europe, as well as the potential for shale production in the US in 2023.

overall activity

The organization also states that the global economy continued on its recovery path for most of 2022, but with varying levels between regions and with “a notable slowdown towards the end of the year”.

The euro zone saw unexpected growth in the first half of the current year, before slowing down in the current half, with higher inflation and the consequent monetary tightening of the European Central Bank (ECB), as well as fears of an energy crisis, says the OPEC.

The US economy, in turn, faced “challenges” in the first half, but is recovering in the current one, supported by healthy consumption.

In China, the strict policy against covid-19 contained growth in 2022. In India, growth was strong in the first half, but slowed down a little in the third quarter, in a context of high inflation. For 2022, the global Gross Domestic Product (GDP) should grow 2.8%, predicts OPEC.

For 2023, the cartel expects global growth to be 2.5%. Relaxing strict Covid-19 policies in China and resolving geopolitical tensions in Eastern Europe could help, OPEC says.