OPEC MOMR (Aug): 2022 world oil demand growth downgraded by 300k BPD from the last; 2023 maintained
DEMAND
- 2022 world oil demand growth downgraded by 300k BPD from the last report to 3.1mln BPD.
- For 2023, the forecast for world oil demand growth remains unchanged at 2.7mln BPD, with total oil demand averaging 102.7mln BPD.
- Total oil demand is expected to average around 100mln BPD in 2022.
- Demand in 2H22 is revised lower, amid expectations of a resurgence of COVID-19 restrictions and ongoing geopolitical uncertainties.
SUPPLY
- Preliminary data indicates that global oil supply in July increased by 1.7mln BPD M/M to average 100.5mln BPD, up by 4.6mln BPD Y/Y.
- According to secondary sources, total OPEC-13 crude oil production averaged 28.84 mb/d in July 2022, higher by 162 tb/d m-o-m. Crude oil output increased mainly in Saudi Arabia, Kuwait and the UAE, while production in Venezuela, Libya and Angola declined.
- The share of OPEC crude oil in total global production decreased by 0.3 pp to 28.7% in July compared with the previous month.
Commentary
- World economic growth is revised down to stand at 3.1% for 2022 and 2023. 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%.
- China’s 2022 growth forecast is revised down to 4.5%, while the 2023 forecast remains unchanged at 5.0%.
- The wide Brent/WTI spread also made US crude more competitive in Asia, supporting VLCC demand.
- While physical oil market fundamentals remain strong, volatility in futures markets remained fuelled by expectations of lower GDP growth, amid rising global inflation.
Analysis details (13:15)
- The morning saw the release of the IEA’s Oil Market Report (OMR) which raised its 2022 estimate for oil demand growth by 380k BPD to 2.21mln BPD due to more gas-to-oil switching, whilst the release suggested that declines in Russian supply are more limited than previously forecast. For 2023, the IEA said demand is set to rise 2.1mln, surpassing pre-COVID levels.
- This comes after the EIA’s Short Term Energy Outlook (STEO) on Tuesday, which downgraded its 2022 world oil demand forecast, whilst upping its 2023 metric marginally to 2.06mln BPD.
11 Aug 2022 - 13:15- EnergyData- Source: OPEC
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