Opec forecasts rise in global oil demand on tourism rebound

REUTERS/Ramzi Boudina

The Organisation of the Petroleum Exporting Countries (Opec) has projected oil demand to grow by 2.3 million barrels per day (bpd) year-on-year in 2023 to average 101.9 million bpd, driven by the continued recovery in the travel and transportation sectors.

While the Organisation for Economic Co-operation and Development (Oecd) is likely 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, the oil group said in its latest monthly market report.

The world economic growth forecast is expected at 2.6 percent for 2023, compared to 3.2 percent in 2022.

“Despite this slight deceleration, the growth of 2.6 percent in 2023 remains a sound growth level when considering the many challenges the global economy faces,” the report said.

These challenges range from elevated worldwide inflation levels and subsequent monetary tightening measures, to the consequences of the geopolitical developments in Eastern Europe.

Opec said crude oil futures prices averaged lower in February as 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.

Opec said that a rebound in the US dollar and the announcement of the sale of 26 million barrels of crude oil from the US strategic petroleum reserve amid signs of a well-supplied market added downward pressure on futures prices.