The OPEC waits for the global demand for crude oil rebound from July, with an increase of 2.4% between the first and second half of 2023, reaching an average of 103.25 million barrels per day (mbd) in the last quarter of the year.
However, in its monthly report published this Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) It is keeping its main forecasts for the full year unchanged.
It highlights that these projections are subject to multiple uncertainties, which is why it justifies maintaining its policy of production cuts.
Global demand (of Petroleum) grow by 2.4 mbd in the second half of 2023″,
driven above all by higher consumption in emerging economies, says OPEC in its report.
By contrast, in the industrialized nations of the Organization for Economic Cooperation and Development (OECD) Oil demand will only increase by 0.2 mbd, thanks to higher consumption in the United States and some regions of Asia. In Europe, even a slight decline is expected, of 0.5%.
Oil demand in non-OECD countries is projected to grow by an average of 2.2 mb/d yoy in the second half of 2023, with China being the largest contributor to oil demand growth.”
The OPEC predicts that in all of 2023, the world will burn an average of 101.9 mbd, 2.34% more than in 2022. These estimates have not changed compared to those made a month ago.
The calculation on the number of barrels that the world will require from the organization’s thirteen partners this year, estimated at 29.3 mbd, also remained unchanged.
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 the 4th to maintain and extend for one more year, until the end of 2024, the strong cuts in their production adopted in October and April in order to prop up the price of “black gold”.
In addition, Saudi Arabia announced a further “voluntary” and unilateral cut of one million bpd in July, with possible extension.
In its report today, the OPEC He justifies that policy as “cautious and preventive.”
“Given the uncertainty in the world economy and in the world oil markets”, the OPEC+ countries (OPEC and allies) decided on June 4 “to continue with their cautious, proactive and preventive approach and, therefore, maintain their adjustments of production until the end of 2024”,
He justifies this strategy with the downside risks he sees in the markets: “global economic growth continues to face uncertainties, with high official interest rates, persistently high underlying inflation and a labor market that remains tense,” he indicates.
Furthermore, it is not yet clear how the geopolitical conflict in Eastern Europe will be resolved.”
adds in a clear allusion to the Russian invasion of Ukraine.
Despite the sharp reductions in supply adopted, crude oil prices fell by almost 10% on average in May.
Brent traded at an average of 75.69 dollars/barrel, a value similar to the monthly price of OPEC crude (75.82 dollars), while Texas intermediate oil (WTI) stood at 71.62 dollars.
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