- OPEC sources see demand growth of 2 million bpd or less in 2023
- The producer group sees demand growth of 3.36 million bpd in 2022
- High fuel prices, supply problems dampen prospects for oil demand
- IEA publishes forecast for 2023 on Wednesday, OPEC in July
LONDON, June 14 (Reuters) – Global oil demand growth will slow in 2023, OPEC delegates and industry sources have said, as rising crude and fuel prices help push up inflation and weigh on the global economy.
Fuel consumption has recovered from the pandemic-induced slump in 2020 and is expected to surpass 2019 levels this year, even as prices hit record highs. But high prices have eaten away at growth forecasts for 2022 and boosted expectations for slower growth in 2023.
The Organization of the Petroleum Exporting Countries is expected to release its first forecast for 2023 demand in July. Their forecast is being closely monitored along with that of the Paris-based International Energy Agency for clues as to how OPEC’s supply policy might evolve.
An OPEC delegate and another source familiar with the OPEC mindset said they expect global demand growth of 2 million barrels per day (bpd) or less in 2023, up just 2% compared to one Growth of 3.36 million bpd expected in 2022.
“Even if it’s only 1 million bpd, that’s still growth and not a peak,” the delegate said of the outlook for next year.
OPEC is expected to release its first demand forecast for 2023 in its monthly bulletin on July 12, an OPEC source said.
The IEA, which advises Western governments on energy policy, will issue its first demand forecast for 2023 in a monthly report on Wednesday, an IEA spokesman said.
OPEC is on the lookout for signs that high fuel prices will destroy oil demand.
Two other OPEC delegates said the demand destruction is likely to hurt oil consumption in the coming months, although one of them said there is little sign of it in the United States, citing recent gasoline demand data.
A senior industry source at a trading firm that is not affiliated with either the IEA or OPEC also said it expects slower demand growth in 2023 and said its initial estimates pointed to demand growth of 2 million bpd or less, compared with a growth of 2.6 million bpd in 2022.
“Crude at $120 a barrel is causing demand destruction,” he said. “It’s already happening.”
Oil demand forecasters are often forced to make significant revisions amid changing economic prospects and geopolitical uncertainties, which this year have included Russia’s invasion of Ukraine and the recent Chinese coronavirus lockdowns.
OPEC originally forecast demand growth in 2022 of 3.28 million
Reporting by Alex Lawler and Dmitry Zhdannikov; Additional reporting by Noah Browning; Edited by Simon Web and Edmund Blair
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