OPEC on Tuesday stuck to its forecasts for global oil demand growth in 2022 and 2023 after several downgrades, saying that while economic slowdown was “quite evident” there was potential upside such as from a relaxation of China‘s zero-COVID policy.
Oil demand in 2023 will rise by 2.25 million barrels per day (bpd), or about 2.3%, the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report, after growth of 2.55 million bpd in 2022. Both forecasts were unchanged from last month.
“Although global economic uncertainties are high and growth risks in key economies remain tilted to the downside, upside factors that may counterbalance current and upcoming challenges have emerged as well,” OPEC said in the report.
“A resolution of the geopolitical conflict in Eastern Europe and a relaxation of China’s zero-COVID policy could provide some upside potential,” the report said in a separate section.
While keeping the annual demand growth forecasts steady, OPEC trimmed the absolute demand forecasts in the fourth quarter of 2022 and the first quarter of 2023. Chinese demand, hit by COVID containment measures, has contracted in 2022, OPEC said.
The report also showed that OPEC’s production dropped in November after the wider OPEC+ alliance pledged steep output cuts to support the market amid the worsening economic outlook and weakening prices.
OPEC said its oil output in November fell by 744,000 bpd to 28.83 million bpd.