OPEC sees global oil demand reaching 102.99 mil b/d in 2023

OPEC continued to project strengthening oil demand growth for the rest of this year, providing the producer bloc and its allies support to keep increasing supplies as many countries seek alternatives to Russian fuel after its invasion of Ukraine.

OPEC's analysts kept 2022 oil demand at 100.29 million b/d, up 3.36 million b/d from 2021, in the organization's closely watched monthly oil market report released July 12.

In its first forecast for 2023, OPEC sees demand rising another 2.70 million b/d to 102.99 million b/d for the year, with the 100 million b/d mark exceeding throughout the year.

The data come as OPEC, Russia and allies are aiming to restore output to prepandemic levels by August. The increased supplies have not been enough for a few consuming countries, including the US, which has repeatedly called on the producer group to supply more crude oil.

US President Joe Biden is scheduled for a trip to Saudi Arabia July 14-16 for a meeting with Persian Gulf leaders, and the oil market is expected to be a subject of discussion.

"Oil demand in 2023 is expected to be supported by a still solid economic performance in major consuming countries, as well as improved geopolitical developments and containment of COVID-19 in China," OPEC said.

The projection of world GDP growth of 3.2% in 2023 "assumes that the ramifications of the pandemic, geopolitical developments in Eastern Europe and global financial tightening amid rising inflation do not negatively impact the 2023 growth dynamic to a major degree."

For 2023, gasoline and diesel are expected to lead oil demand growth. Jet fuel will continue to recover as domestic and international travel picks up while business travel continues to lag, according to OPEC.

Light distillates will be supported by capacity additions including NGLs plants in the US, propane dehydration plants in China and steady petrochemicals margins, it said, repeating the same outlook it gave for light distillates for 2022.

While non-OPEC liquids production is forecast to climb 1.71 million b/d in 2023, OPEC's NGLs and non-conventional output is set to increase only 50,000 b/d compared with 110,000 b/d in 2022, the analysis showed.

The call on OPEC's crude in first-quarter 2023 will be 29.01 million b/d, which is more than OPEC's June output of 28.72 million b/d, according to the report, citing available secondary sources.