OPEC sticks to its optimistic forecasts for oil demand growth in 2022 and 2023

OPEC on Tuesday maintained its forecast for strong global oil demand growth in 2022 and 2023, based on indications that major economies are doing better than expected despite unfavorable factors such as rising inflation.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that oil demand will increase by 3.1 million barrels per day in 2022 and 2.7 million barrels per day in 2023, unchanged from its forecast last month.

Oil consumption has rebounded from pandemic lows, although higher prices and the coronavirus outbreak in China have dampened growth forecasts for 2022.

OPEC now expects oil consumption in 2023 to exceed consumption in 2019, after it said this year that it expected that to happen in 2022.

“Demand for oil in 2023 is expected to be supported by the still-strong economic performance in major consuming countries, as well as potential improvements in COVID-19 restrictions and geopolitical uncertainty,” OPEC said in the report.

The organization and its allies, including Russia, in what is known as the OPEC + group, boosted oil production this year as they seek to cancel record cuts that were applied in 2020 after the pandemic led to a decline in demand.

However, in the past few months, OPEC+ has failed to achieve the planned production increases due to the lack of investment in oil fields by some OPEC members and the decline in Russian production.

The monthly OPEC report showed that the organization’s production recorded a significant increase in August, rising by 618,000 barrels per day to reach 29.65 million barrels per day, although much of this is due to the recovery of Libyan supplies from the production interruption.