Opec leaves global oil demand forecast unchanged

Opec left its forecasts for world oil demand unchanged on Tuesday, but warned that the global economy was "fraught" with uncertainty.

The cartel, publishing its latest monthly report, forecast world oil demand growth for 2022 would be 3.4m barrels per day (bpd), with demand projected to average 100.29m bpd, unchanged on May’s estimates. Demand is expected to exceed pre-pandemic levels by 0.09m bpd.

Within that, it revised down its forecast for the second quarter to reflect the lockdowns in China but upgraded expectations for the third, on likely strong demand during the summer holiday and driving season.

The second half, however, was harder to predict, the Vienna, Austria-based body acknowledged. "Once the summer holidays are over it will remain to be seen to what extent inflation, that is, the rising cost of living, financial tightening and rising geopolitical uncertainty dampen the growth dynamic towards the end of the year," it said.

Opec also cut its estimate for Russia’s liquids supply by 0.25m bpd, reducing the forecast for non-Opec supply growth to 2.1m bpd.

"Lower production from Russia was likely to be offset by higher output in other regions like Latin America," it said. "However, the second half of the year remains highly uncertain due to the geopolitical developments in eastern Europe."

It reiterated expectations that the global economy will grow at 3.5% in 2022, but warned: "The global economy in 2022 continues to be fraught with uncertainty."