The Organisation of the Petroleum Exporting Countries, popularly known as OPEC, has raised its 2023 global oil demand growth forecast amid China’s relaxation of COVID-19 restrictions, and trimmed supply forecasts for Russia and other non-OPEC producers.
Pointing to a tighter market, OPEC noted in its monthly report that global oil demand will rise this year by 2.32 million barrels per day (bpd), or 2.3%.
The projection is 100,000 bpd higher than last month’s forecast.
“Key to oil demand growth in 2023 will be the return of China from its mandated mobility restrictions and the effect this will have on the country, the region and the world,” OPEC said in the report.
The OPEC report was upbeat on economic prospects, nudging up its 2023 global growth forecast to 2.6% from 2.5%, though it said that a relative slowdown remained evident and cited high inflation and expected further increases to interest rates.
Other upside factors are the likelihood that the U.S. Federal Reserve will manage a soft landing for the U.S. economy and further commodity price weakness, OPEC said, although various potentially negative factors persist.
