OPEC Estimates Increase in Global Oil Demand
Global oil demand will rise this year by 2.32 million barrels per day (bpd), or 2.3%, the Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday in a monthly report. The projection was 100,000 bpd higher than last month’s forecast.
OPEC added to its expectations for oil demand this year as stronger-than-expected economic growth in Europe and the U.S. coupled with China’s reopening of its economy should lift the global appetite for crude oil.
In a closely-followed monthly market report Tuesday, the Organization of the Petroleum Exporting Countries raised its forecasts for global oil demand growth this year by 100,000 barrels a day.
The Oil group said major economies were showing greater than expected resilience to the impact of higher interest rates and high inflation. Strong consumer spending had further lifted the economic outlook while inflation was showing signs of cooling.
Meanwhile, OPEC sounded a more optimistic note about China’s reopening than it has in past reports, saying it should have a positive knock-on positive impact on global growth though it warned that could also add to global inflation.
OPEC raised its forecasts for global economic growth this year to 2.6% from an earlier forecast of 2.5%.
In Europe, concerns that soaring natural gas prices would hammer the region’s economy over the winter months have abated after milder weather and efforts to build sizable stockpiles of gas have seen gas prices fall back.
Meanwhile, in the U.S., the Federal Reserve’s efforts to tame inflation with interest rate rises have shown signs of success while economic data has remained surprisingly resilient, lifting hopes that the world’s largest economy can dodge a recession.
OPEC raised its forecast for economic growth in the Eurozone this year to 0.8% from 0.4%, while it lifted its U.S. growth outlook to 1.2% from 1%.
In China, the reopening of the economy coupled with government stimulus measures should mean stronger-than-expected economic growth this year, OPEC said. It raised its 2023 China growth forecast to 5.2% from 4.8%.
Much would depend, however, on how Chinese policymakers manage the country’s reopening and how it dealt with fresh flare-ups in Covid-19 cases, OPEC said.
“Concern hovers around the depth and pace of the country’s economic recovery and the consequent impact on oil demand,” OPEC said in the report. “Much will depend on how the government plans to manoeuvre the delicate balance of curbing Covid-19 infections versus opening up for business.”
OPEC lowered its forecasts for Russian oil production this year by 50,000 barrels a day to 10.13 million barrels a day.
The cartel, which is allied with Russia and other oil-producing countries, in a grouping known as OPEC+, expects Russian output to fall by 900,000 barrels a day compared with 2022 levels. # OPEC Estimates Increase in Global Oil Demand
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