Vienna, Austria – The Organisation of the Petroleum Exporting Countries (OPEC) projected oil demand to grow by a healthy 2.3 mb/d YoY in 2023 to average at 101.9 mb/d, driven by the ongoing recovery in the travel and transportation sectors.
“Following estimated growth of 2.5 mb/d y-oy in 2022, oil demand is forecast to grow by a healthy 2.3 mb/d y-o-y in 2023 to average at 101.9 mb/d. While the OECD is projected to fall slightly short of pre-COVID-19 levels in 2023, oil demand in the non-OECD region is estimated to have surpassed 2019 levels already in 2022,” OPEC said in its latest Monthly Oil Market Report.
“Given the ongoing high level of uncertainty with regard to the timing and extent of a full global economic recovery to pre-pandemic levels in all sectors, the OPEC and non-OPEC countries participating in the DoC continue to carefully monitor market developments and address challenges in order to ensure sustainable market stability for the benefit of the global economy,” the report added.
The world economic growth forecast for 2023 is expected at 2.6 percent y-o-y, following growth of 3.2% in 2022, according to OPEC.
“Despite this slight deceleration, the growth of 2.6 percent in 2023 remains a sound growth level when considering the many challenges that the global economy is facing. These challenges range from elevated worldwide inflation levels and subsequent monetary tightening measures, to the consequences of the geopolitical developments in Eastern Europe,” the report explained.
On crude oil futures prices, OPEC said they averaged lower in February. That said, the prospect of oil demand recovery in China limited futures price losses.
“The decline accelerated in the second half of the month, along with selloffs in major equity markets, as concerns about the impact of aggressive rate hikes from major central banks, including the US Federal Reserve, dominated market sentiment,” the report said. “A rebound in the US dollar and the announcement of the sale of 26 mb of crude oil from the US Strategic Petroleum Reserve (SPR) amid signs of a well-supplied market added downward pressure on futures prices. However, the prospect of oil demand recovery in China limited futures price losses.”
