OPEC expects world demand to grow by 2 million barrels per day or less in 2023, compared to 3.36 million barrels per day expected in 2022.
OPEC representatives and industry sources said that growth in world oil demand will slow in 2023, as rising crude and fuel prices help fuel inflation and act as a drag on the global economy. .
Fuel use has resumed from the pandemic-induced slowdown in 2020 and is set to surpass 2019 levels this year, even as prices hit record highs. But higher prices have dented growth projections for 2022 and dashed expectations of slower growth in 2023.
The Organization of the Petroleum Exporting Countries is expected to publish its first forecast for 2023 demand in July. Its forecast, along with that of the Paris-based International Energy Agency, will be watched closely for hints at how OPEC supply policy might evolve.
An OPEC representative and another source familiar with OPEC’s thinking said they expect world demand to grow by 2 million barrels per day (bpd) or less in 2023, compared to an expected 3.36 million bpd growth in 2022. An increase of just 2%.
“Even if it is only 1 million bpd, it is still growth and not a peak,” the representative said of the outlook for next year.
OPEC is expected to publish its first demand forecast for 2023 in its monthly report on July 12, an OPEC source said.
The IEA, which advises Western governments on energy policy, will deliver its first 2023 demand forecast in a monthly report on Wednesday, an IEA spokesperson said.
OPEC is watching for signs that higher fuel prices will reduce demand for oil.
Two more OPEC representatives said the demand destruction was likely to take a toll on oil use in the coming months, though one of them said it is still in the United States, citing recent gasoline demand data. Till now there was little sign of it.
A senior industry source at a trading firm not affiliated with the IEA or OPEC also said they expected lower demand growth in 2023, with their initial estimates projecting 2.6 million bpd growth in 2022 to 2 million bpd or less. pointed to the demand. ,
“Crude at $120 a barrel is hurting demand,” he said. “It’s already happening.”
Oil demand forecasters often have to revise massively given changes in the economic outlook and geopolitical uncertainties, including Russia’s invasion of Ukraine this year and the recent Chinese coronavirus lockdown.
OPEC had originally forecast demand growth of 3.28 million bpd in 2022, in its first forecast published in July 2021, raising it to more than 4 million bpd before later cutting it to 3.36 million bpd.
(Reporting by Alex Lawler and Dmitry Zhdannikov; Additional reporting by Noah Browning; Editing by Simon Webb and Edmund Blair)
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