Friday, June 9, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use
Oil Market News
  • Home
  • Marketdaily
  • Price
  • crudenow
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEChot
  • brend
  • ships
Oil Market News
Home OPEC

If we’re lucky, OPEC is wrong about oil demand going up

11 months ago
in OPEC
If we’re lucky, OPEC is wrong about oil demand going up
Share on FacebookShare on Twitter


By Julian Lee

We’d better hope the forecasters at OPEC have got their numbers wrong. If they haven’t, then the members of the oil producer group may struggle to supply as much crude as the world will need next year.

Their latest forecast, which extends the outlook to the end of next year, shows global oil demand rising strongly again in 2023, despite growing fears over inflation and warnings of impending recession. A lack of investment in new crude production capacity elsewhere means that the OPEC group will need to pump more to meet that extra demand.

OPEC’s outlook for demand is more robust than that of analysts at the International Energy Agency or the US Energy Information Administration, both of which also updated their outlooks last week. All three bodies see global oil demand increasing by at least 2 million barrels a day next year, taking it back above the 2019 level for the first time since the Covid-19 pandemic struck in early 2020. But the producer group’s increase of 2.7 million barrels a day makes it the most optimistic on demand for a third year in a row.

This Panglossian view assumes that neither lingering Covid, Russia’s invasion of Ukraine, nor financial tightening amid soaring inflation undermines global economic growth to a significant degree. It does note, though, that the uncertainties around its forecast “remain to the downside.” We’d better hope for some downside revisions.

The growth that OPEC foresees will take global oil demand to 103 million barrels a day on average in 2023, well above it’s pre-pandemic level. The group is also much more sanguine that its counterparts about supply. It sees no impact on Russia’s oil production from European Union sanctions due to come into effect in early December, or maybe it anticipates that the price cap sought by the US on Moscow’s exports will support flows.

Combine the demand and supply outlooks, and it looks like the 13 members of OPEC will need to deliver more than 30 million barrels a day on average in 2023, according to both OPEC and the IEA. The EIA outlook puts the figure at 29.4 million barrels a day.

That’s not a record for the group, but it would be the highest since 2018, according to OPEC’s own figures. More importantly, it would push the group’s spare capacity to a multi-year low of about 2 million barrels a day, based on Bloomberg’s assessment of sustainable production capacities.

The last time the current members of OPEC collectively pumped more than 30 million barrels a day, the combined output of five of them — Algeria, Iran, Libya, Nigeria and Venezuela — was almost 2.75 million barrels a day higher than it is now. But only three members pumped more last month than they did on average in 2018 — Iraq, Saudi Arabia and the United Arab Emirates.

That’s not a result of voluntary restraint. Collectively, the OPEC members haven’t pumped as much as they were permitted since July 2020.

Initially, that helped balance over-production by the allies with whom they struck an accord in 2020. More recently, it has reflected an inability to boost output in line with rising targets. The combined production of the 10 members of OPEC bound by the deal was more than 1 million barrels a day below the permitted level in both May and June, with Angola and Nigeria falling way behind.

OPEC producers’ inability to raise production rates when oil prices are above $100 a barrel and demand for their crude is soaring doesn’t bode well for the future. The group will need to pump about 1.36 million barrels a day more on average next year than it did last month if it’s to balance supply and demand.

Yet only Saudi Arabia and the UAE have significant amounts of spare capacity, and they are already facing requests from the US to pump more oil now in an attempt to rein in inflation. Boosting output by the amount required would require both of them to sustain output for many months at levels they haven’t achieved before. 

With little new OPEC production capacity expected next year, that’s going to leave the world uncomfortably short of a supply cushion. Unless, of course, demand growth turns out to be nowhere near as strong as the forecasters are suggesting. Maybe if we’re lucky.



news.google.com

Latest Oil News

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023
‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

January 31, 2023
OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

January 30, 2023
Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

January 29, 2023
Tags: BUSINESSCrude OildemandluckyoilOPECopinionwrong
Previous Post

Indian refiners’ June crude processing stays robust, output slips, Auto News, ET Auto

Next Post

Daiwa Securities Group Inc. Decreases Stock Holdings in United States Brent Oil Fund

Related Posts

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

by Oil Market News
February 1, 2023
0

US stocks went on a Fed rollercoaster ride; weakening after the statement suggested the Fed will stick to their rate...

‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

by Oil Market News
January 31, 2023
0

OPEC chief talks about output cuts, price volatility, and Russia’s war in Ukraine and its effect on oil prices.Ministers from...

OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

by Oil Market News
January 30, 2023
0

While all eyes are temporarily on the Federal Reserve’s rate hike plans and a virtual meeting of OPEC+ ministers–both on...

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

by Oil Market News
January 29, 2023
0

There will be no shortage of potential market moving events this week!  After the Bank of Canada hiked rates by...

Top 20 Oil Exporting Countries in 2023

Top 20 Oil Exporting Countries in 2023

by Oil Market News
January 28, 2023
0

In this article, we take a look at the top 20 oil exporting countries in 2023. If you want to...

OPEC to Stay the Course on Oil Production Agreement; China’s Reopening Bullish for

OPEC to Stay the Course on Oil Production Agreement; China’s Reopening Bullish for

by Oil Market News
January 27, 2023
0

OPEC to Stay the Course on Oil Production Agreement; China's Reopening Bullish for Commodities, RBC Capital Markets Says Marketscreener.comOil Gains...

Next Post
Daiwa Securities Group Inc. Decreases Stock Holdings in United States Brent Oil Fund

Daiwa Securities Group Inc. Decreases Stock Holdings in United States Brent Oil Fund

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Trend Oil News

The Commodities Feed: OPEC struggling | Snap

The Commodities Feed: OPEC struggling | Snap

11 months ago
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.49% By

U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.49% By

1 year ago
Razor-Thin Spare Capacity To Keep Oil Prices Elevated

Razor-Thin Spare Capacity To Keep Oil Prices Elevated

9 months ago
US military forces smuggle wheat crops, crude oil from northeast Syria to Iraq

US military forces smuggle wheat crops, crude oil from northeast Syria to Iraq

8 months ago
In Scotland’s oil and gas capital, uncertainty clouds the green transition

In Scotland’s oil and gas capital, uncertainty clouds the green transition

2 months ago
ADVERTISEMENT
UK set to introduce floor for oil and gas windfall tax

UK set to introduce floor for oil and gas windfall tax

June 9, 2023

Canadian refiner Irving Oil explores options including sale

June 8, 2023

UK watchdog bans Shell, Repsol and Petronas greenwashing ads

June 7, 2023

Opec+ is not on board with Saudi’s ‘whatever it takes’ message

June 6, 2023

Saudi Arabia seeks to boost oil price with output cut of 1mn barrels a day

June 5, 2023

Opec bans prominent media groups from Vienna meeting

June 4, 2023

Crude Oil

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

February 1, 2023
Oil rises after U.S. fuel stocks draw down; economic concerns loom

Oil prices settle steady on higher U.S. demand, weaker dollar

January 31, 2023
S&P 500 Down 1%; Crude Oil Drops Over 2%

S&P 500 Down 1%; Crude Oil Drops Over 2%

January 30, 2023
Russia Can’t Replace the Energy Market Putin Broke

Russia Can’t Replace the Energy Market Putin Broke

January 29, 2023

Investing

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023
Crude Oil Shielded From Bond and Stock Market Rout

Clean-energy investing poised to top money backing oil and gas after hitting a record

January 31, 2023
Crude Oil Shielded From Bond and Stock Market Rout

The Cushing® MLP & Infrastructure Total Return Fund Announces Fund Name Change

January 30, 2023
Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

January 29, 2023

Market

UK set to introduce floor for oil and gas windfall tax

UK set to introduce floor for oil and gas windfall tax

June 9, 2023
Canadian refiner Irving Oil explores options including sale

Canadian refiner Irving Oil explores options including sale

June 8, 2023
UK watchdog bans Shell, Repsol and Petronas greenwashing ads

UK watchdog bans Shell, Repsol and Petronas greenwashing ads

June 7, 2023
Opec+ is not on board with Saudi’s ‘whatever it takes’ message

Opec+ is not on board with Saudi’s ‘whatever it takes’ message

June 6, 2023

OPEC

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023
‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

January 31, 2023
OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

January 30, 2023
Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

January 29, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use

© 2022 OilMarket.News

No Result
View All Result
  • Home
  • Market
  • Price
  • crude
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEC
  • brend
  • ships

© 2022 OilMarket.News

wpDiscuz
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.