OPEC expects world oil consumption to rise by 2.4% in the second half of 2023
OPEC expects global demand for crude oil to pick up from July, with an increase of 2.4% between the first and second half of 2023, to an average of 103.25 million barrels per day (mbd) in the last quarter of the year.
However, in its monthly report published on Tuesday, the Organisation of the Petroleum Exporting Countries (OPEC) left its main forecasts for the full year unchanged.
It stresses that these projections are subject to multiple uncertainties, which is why it justifies maintaining its policy of production cuts.
"World (oil) demand is projected to grow by 2.4 mbd in the second half of 2023," driven mainly by higher consumption in emerging economies, OPEC says in its report.
By contrast, in the industrialised nations of the Organisation for Economic Co-operation and Development (OECD), oil demand will increase by only 0.2 mbd, thanks to higher consumption in the United States and some regions of Asia. In Europe, even a slight decline of 0.5 % is expected.
"Oil demand in non-OECD countries is projected to grow by an average of 2.2 mb/d y-o-y in the second half of 2023, with China being the largest contributor to oil demand growth".
OPEC forecasts that in all of 2023, the world will burn an average of 101.9 mbd, up 2.34% from 2022. These estimates are unchanged from those made a month ago.
The estimate of the amount of barrels the world will require from the organisation's thirteen partners this year also remained unchanged at 29.3 mbd.
Despite the fact that this represents an increase of 0.9 mbd compared to 2022, OPEC and its ten allied countries, including Russia, decided on 4 October to maintain and extend for another year, until the end of 2024, the sharp cuts in production adopted in October and April in order to shore up the price of "black gold".
In addition, Saudi Arabia announced an additional, "voluntary" and unilateral cut of one million bd in July, with a possible extension.
In its report today, OPEC justifies this policy as "cautious and pre-emptive".
"Given the uncertainty in the global economy and world oil markets", OPEC+ countries (OPEC and allies) decided on 4 June "to continue their cautious, proactive and pre-emptive approach and therefore to maintain their production adjustments until the end of 2024", the document recalls.
It justifies this strategy with the downside risks it sees in the markets: "global economic growth continues to weather uncertainties, with high policy interest rates, persistently high underlying inflation and a labour market that remains tight," it says.
"Moreover, it remains unclear how the geopolitical conflict in Eastern Europe will be resolved," it adds, in a clear reference to Russia's invasion of Ukraine.
Despite sharp reductions in supply, crude oil prices fell by almost 10 % on average in May.
Brent was quoted at an average of 75.69 dollars/barrel, similar to the monthly price of OPEC crude oil (75.82 dollars), while Texas Intermediate (WTI) oil stood at 71.62 dollars.