OPEC kept its global oil demand growth forecast for 2023 unchanged for the fourth month in a row. OPEC’s monthly report warned that the world economy faces increased uncertainty and slower growth in the second half.
According to the report, world oil demand will increase by 2.35 million barrels per day, or 2.4%, in 2023. This estimate is almost the same as OPEC’s assessment last month.
The OPEC report stated that there are increasing uncertainties about economic growth in the second half of 2023 due to factors such as high inflation, high interest rates and tight labor markets. It was also noted that there is still no clarity on the resolution of the geopolitical conflict in Eastern Europe.
In the report, OPEC stated that oil production in May decreased by 464,000 barrels/day to 28.06 million barrels/day, driven by voluntary cuts promised by Saudi Arabia and other members.
Peak Remains Far Away in Petroleum, Decline Continues
Brent Oil prices have dropped from their peak of $131 in March 2022 to $73 as of today. According to experts, the main reason for the decline is the uncertain outlook in global economic growth, inflation and tight labor market, as mentioned in OPEC’s self-published report.
On the other hand, it remains unclear whether China will positively develop global economic growth as expected, while the technical recession of the Eurozone and the default crisis in the USA have been resolved, but the echo it left supports the negative course of oil prices.
Brent oil, which has lost close to 4 percent compared to last week, is trading with a premium course of close to 2 percent on the new day, but still has declined by nearly 40 percent from its peak of $131.
