The Organization of the Petroleum Exporting Countries (OPEC) has cut back its forecast of oil demand growth in 2022 for the third time since April.
OPEC noted that the cut in growth forecast is attributed to the economic impact due to Russia’s invasion of Ukraine, along with the effects of high inflation.
It expects oil demand to rise by 3.1 million barrels per day, down 260,000 bpd from the previous forecast of 3.36 million.
It added the demand growth for 2023 will slow further to 2.7 million bpd, leaving its forecast unchanged from last month.
The report further said the global oil market is strongly rebounding to pre-COVID-19 levels.
The monthly report revealed that OPEC output in July rose by 162,000 bpd to 28.84 million bpd.
While the 2023 outlook for overall non-OPEC supply was left steady, OPEC sees a slight acceleration in US shale growth.
Supply of US tight oil, another term for shale, is expected to rise by 800,000 bpd in 2023, up from 740,000 bpd in 2022, although this year’s forecast was revised down.