OPEC on Oct. 12 cut its 2022 forecast for growth in world oil demand for a fourth time since April and also trimmed next year's figure, citing slowing economies, the resurgence of China’s COVID-19 containment measures and high inflation.
Oil demand will increase by 2.64 million bbl/d or 2.7% in 2022, OPEC said in a monthly report, down 460,000 bbl/d from the previous forecast.
The lower demand outlook gives additional context for last week’s move by OPEC and its allies, known as OPEC+, to make their largest cut in output since 2020 to support the market. The U.S. criticized the decision.
“The world economy has entered into a time of heightened uncertainty and rising challenges, amid ongoing high inflation levels, monetary tightening by major central banks, high sovereign debt levels in many regions as well as ongoing supply issues,” OPEC said in the report.
Next year, OPEC expects oil demand to rise by 2.34 million bpd, 360,000 bbl/d lower than previously forecast.
OPEC+ has for most of this year been ramping up oil output to unwind record cuts put in place in 2020 after the pandemic slashed demand.
Their decision for September 2022 called for a 100,000 bbl/d increase in the group's output target, of which about 64,000 bbl/d was meant to come from the 10 participating OPEC countries.
The report showed OPEC output rose by 146,000 bbl/d to 29.77 million bbl/d in September, led by Saudi Arabia and Nigeria.
Still, OPEC is pumping far less than called for by the OPEC+ agreement due to underinvestment in oilfields by some members.
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