OPEC MOMR (Aug): 2022 world oil demand growth downgraded by 300k BPD from the last; 2023 maintained
SourceNewsquawk
SectionEnergy & Power
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.
