By Our Correspondent
The Organisation of Petroleum Exporting Countries, OPEC, has revised down the World Economic Growth to stand at 3.1 per cent for 2022 and 2023, implying relatively low demand for oil.
According to OPEC, “This is a result of weaker 2Q22 growth in the major economies and an observed soft trend in some key economies. For the US, GDP growth for 2022 is revised down to 1.8%, and to 1.7% for 2023. Euro-zone economic growth for 2022 is expected at 3.2%, while growth in 2023 is revised down to 1.7%.
“Japan’s economic growth for 2022 is revised down to stand at 1.4%, to be followed by growth of 1.6% in 2023. China’s 2022 growth forecast is revised down to 4.5%, while the 2023 forecast remains unchanged at 5.0%. The forecast for India remains unchanged at 7.1% in 2022 and 6.0% in 2023. Brazil’s economic growth forecasts remain at 1.2% in 2022 and 1.5% in 2023.
“The 2022 forecast for Russia is unchanged, showing a contraction of 6.0% followed by growth of 1.2% in 2023. Downside risks remain, stemming from the ongoing geopolitical tensions, the continued pandemic, ongoing supply chain issues, rising inflation, high sovereign debt levels in many regions, and expected monetary tightening by central banks in the US, the UK, Japan and the Euro-zone.”
The organization, which also revised oil demand growth in 2022 downwards, stated: “World oil demand growth in 2022 is revised downwards from the previous month’s assessment but still shows healthy growth of 3.1 mb/d, including the recently observed trend of burning more crude in power generation. Oil demand in the OECD is estimated to grow by 1.6 mb/d, while the non-OECD is expected to grow by 1.5 mb/d. Total oil demand is expected to average around 100 mb/d in 2022. The first half of this year is revised higher, amid better-than-anticipated oil demand in the main OECD consuming countries.
“However, oil demand in 2H22 is revised lower, amid expectations of a resurgence of COVID-19 restrictions and ongoing geopolitical uncertainties. For 2023, the forecast for world oil demand growth remains unchanged at 2.7 mb/d, with total oil demand averaging 102.7 mb/d. The OECD is expected to grow by 0.6 mb/d and the non-OECD by 2.1 mb/d.
“Oil demand in 2023 is expected to be supported by a still-solid economic performance in major consuming countries, as well as improving geopolitical developments and improvement of COVID-19 in all regions.”
However, it maintained that, “non-OPEC liquids supply growth in 2022 is forecast at 2.1 mb/d to average of 65.8 mb/d, broadly unchanged from the previous assessment. An upward revision to Russia is offset by downward revisions to the US, Norway and Kazakhstan. The main drivers of liquids supply growth for 2022 are expected to be the US, Canada, Brazil, China and Guyana, while production is expected to decline mainly in Indonesia and Thailand. In 2023, growth in non-OPEC liquids production remains unchanged at 1.7 mb/d to average 67.5 mb/d. The main drivers for growth in 2023 are expected to be the US, Norway, Brazil, Canada and Guyana.”
