On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) cut its global estimate for growth in oil demand, acting as the third estimation cut since April. OPEC’s report comes out the same day as the International Energy Agency (IEA), which raised its prediction for 2022 global growth.
OPEC’s Thursday report illustrates a demand of 3.1 million barrels per day, a decline of 260,000 BPD from their previous findings. In its August monthly report, OPEC addressed these inconsistencies and a hopeful future, “World oil demand growth in 2022 is revised downwards from the previous month’s assessment but still shows healthy growth of 3.1 mb/d.”
OPEC blames high global inflation and the effects of Russia’s invasion of Ukraine for the dwindling oil demand.
Despite its downfall, OPEC remains unphased. The company’s 2023 forecast did not change, staying at 2.7 million BPD. Experts also expect supplies from non-member countries to rise by 1.71 million BPD, meaning OPEC will need to pump around 900,000 BPD more to balance the market.
Although this year’s prediction was revised downward, the supply of U.S. tight oil, another name for fracking, is anticipated to increase by 800,000 BPD in 2023 from 740,000 BPD in 2022.