<article><p class="lead">Opec has made a substantial cut to its global oil demand growth forecast for both this year and 2023 in response to a deteriorating economic outlook. The revision comes less than a week after the wider Opec+ coalition agreed a 2mn b/d crude quota cut driven by the same concerns. </p><p>Global oil demand growth is now forecast at 2.64mn b/d this year, 460,000 b/d below last month's projection, Opec said today in its latest <i>Monthly Oil Market Report</i> (MOMR). Demand growth for next year has been revised down by 360,000 b/d to 2.34mn b/d.</p><p>Opec cites "the extension of China's zero-Covid-19 restrictions in some regions, economic challenges in OECD Europe, and inflationary pressures in other key economies" as factors behind the 2022 revision. Last week the wider Opec+ group gave the same reasons for a 2mn b/d decline in its collective crude output target from November.</p><p>Notably, Opec now sees demand in China, the world's largest crude importer, dropping by 60,000 b/d this year. Last month it forecast Chinese demand would rise by 120,000 b/d in 2022. Opec sees demand for its own members' crude at 28.68mn b/d this year and 29.45mn b/d next year, lower by a respective 200,000 b/d and 300,000 b/d from the previous MOMR.</p><p>On supply, Opec has trimmed its forecast for non-Opec liquids growth to 1.93mn b/d this year, down by 180,000 b/d from the previous report, with downgrades in OECD Europe, Asia-Pacific and parts of Eurasia offsetting gains in Latin America. Increases in oil, gas and fracking activity will support US production, but "severe inflationary pressure, coupled with logistical bottlenecks and shortages of material and labour, are posing additional challenges", Opec said. </p><p>The group has trimmed its US oil output growth outlook by 20,000 b/d from last month to 1.09mn b/d in 2022. It has lowered its Russian oil production growth estimate by 20,000 b/d to just 60,000 b/d this year. For 2023, the projection for non-Opec liquids supply growth has been reduced by 200,000 b/d to 1.73mn b/d. </p><p>Opec members lifted crude production by 146,000 b/d on the month to 29.77mn b/d in September, the group said, citing the average estimates of seven independent sources, <a href="https://direct.argusmedia.com/newsandanalysis/article/2378474">including Argus</a>. The largest discrepancy between directly communicated and secondary-source figures occurred in Angola, which reported an 88,000 b/d drop in production in September, while secondary sources estimated a 13,000 b/d increase. </p><p>Citing provisional August data, Opec says OECD commercial oil stocks increased by 7.8mn bl on the month to 2.712bn bl, sitting 111mn bl below the same period of 2021. August inventories were 267mn bl under the 2015-19 average. </p><p class="bylines">By Ruxandra Iordache</p></article>
