Last Tuesday, OPEC published a demand growth forecast calling for 400,000 bpd in growth from Organization for Economic Cooperation and Development (OECD) countries and 2 million bpd from non-OECD countries.
The world oil body raised its oil demand growth forecast for 2023 by 100,000 bpd, to 2.3 million bpd. The new report is contained in its latest edition of the Monthly Oil Market Report.
However, the organization did not make significant changes to its 2022 overall world oil demand growth forecast, although it made downward OECD demand adjustments, and upward non-OECD demand adjustments, largely on the back of “improvements in economic activity in some countries and a slight recovery in oil demand in China after the lifting of its zero-Covid-19 policy.
OPEC did not make any changes to the 2022 demand for OPEC crude oil either, which remains at 28.6 million bpd—around 500,000 bpd higher than in 2021.
But for this year, OPEC revised up its demand outlook for OPEC crude oil by 200,000 from its previous forecast, to 29.4 million bpd—800,000 bpd higher than last year.
Global oil demand for last year is estimated to have grown by 2.5 million bpd, according to the MOMR, on the back of growth from both OECD and non-OECD countries with the exception of China, which saw its oil demand fall as its net zero Covid-19 policies took hold.
For oil products, OPEC sees transportation fuels as the main drivers of oil demand, with gasoline and diesel consumption forecast to increase 1.1 million bpd year over year—well above pre-pandemic levels. Jet fuel demand is also expected to rise 1.1 million bpd year over year as travel recovers.
According to OPEC, the “key” to oil demand growth this year will be the return of China from its Covid-19 economic slumber. OPEC also delicately mentioned “geopolitical tensions” as a 2023 “global economic concern” that could impact the demand for crude oil and crude oil products.
By Bosco Agba