OPEC sees oil demand growth at 2.4 million b/d in the second half of 2023
The Organization of the Petroleum Exporting Countries (OPEC) has kept its 2023 demand outlook unchanged but expects the third quarter to be marred by economic headwinds.
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OPEC’s latest global crude demand growth forecast for 2023 remains largely unchanged from last month's estimates, at 2.33 million b/d. In its flagship Monthly Oil Market Report, the oil producer group still sees the world's oil demand at 101.9 million b/d for the year.
It expects global oil demand growth of 2.4 million b/d in the second half of the year.
Non-OECD regions, such as Asia, the Middle East and Russia are projected to consume an average of 55.92 million b/d. Oil demand in the OECD region, mainly the US and Europe, is forecast at 46.00 million b/d. The demand projections are largely unchanged from the last month’s estimates.
The US and Europe have experienced steady demand growth so far this year, while India, China, Brazil and Russia have seen stronger economic growth, argues OPEC. It has raised the prospects for oil demand growth in the second half of the year.
A surge in domestic airline activity and the summer driving season will boost US oil demand, according to the Vienna-headquartered group. It continues to view India and China as sweet spots for demand growth.
There is, however, some risk that economic growth will be dampened in the third quarter with less consumer spending on services, and as a result of persistently high inflation, financial tightening and heightened geopolitical uncertainty. It is likely that OECD countries will feel the greatest impact, warns OPEC.
The oil producers' alliance has attributed the oil production cuts it announced a week ago to these potential risks.
Supply projections
OPEC estimates non-OPEC liquids production to grow by 1.4 million b/d, to average 67.2 million b/d this year. This estimate is unchanged from last month.
The core OPEC-13 members produced 28.06 million b/d in May, a decline of 464,000 b/d from April.
By Konica Bhatt
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