OPEC maintained its predictions for strong growth in global oil demand in 2022 and 2023, citing indications that major economies were performing better than anticipated despite challenges including rising inflation, Reuters reported.
It stated in a monthly report that oil demand will rise by 3.1 million barrels per day (bbl/d) in 2022 and by 2.7 million bbl/d in 2023, both increases being similar to last month’s predictions.
Oil consumption has increased since the pandemic’s lows, but forecasts for 2022 have been reduced by high costs and outbreaks of the Chinese coronavirus. According to OPEC, the downgrades have pushed out a recovery in oil consumption to levels above 2019 until 2023.
“Oil demand in 2023 is expected to be supported by a still-solid economic performance in major consuming countries, as well as potential improvements in COVID-19 restrictions and reduced geopolitical uncertainties,” OPEC said in Tuesday’s report.
It predicts that global oil demand would average 102.73 million bbl/d in 2023, up from the pre-pandemic figure in 2019.
OPEC had predicted a rise in demand above pre-pandemic levels in 2022 earlier this year.
The report highlighted evidence of activity holding up, including retail expenditure in the US and the Eurozone, while highlighting the potential for upside risks. OPEC kept its global economic growth predictions for 2022 and 2023 stable at 3.1%.
Leading exporter Saudi Arabia informed OPEC that it increased output in August by more than secondary sources indicated, rising to just over 11 million bbl/d, up 236,000 bbl/d from July. This resulted in a smaller global buffer of unutilized capacity.
Some industry sources have questioned whether Saudi Arabia can pump 11 million bbl/d for an extended period of time, despite the fact that the kingdom claims to have a maximum capacity of 12 million bbl/d.