Opec leaves oil market outlook unchanged, again

Opec has left its key forecasts for 2023 oil supply and demand unchanged for the second month running and has once again flagged up uncertainties around global economic growth and the outlook for Russian oil production.

The forecast for global oil demand growth has been left unchanged at 2.22mn b/d for this year. While the group's latest Monthly Oil Market Report (MOMR) notes a "better performance in China's economy on the back of its reopening from Covid-19 restrictions", it nudged down its Chinese oil demand growth forecast by 20,000 b/d from the previous report to 510,000 b/d.

Opec sees global oil demand hitting 101.8mn b/d in 2023, up from 99.55mn b/d in 2022. But the forecast is "subject to many uncertainties, including global economic developments, shifts in Covid-19 policies and ongoing geopolitical tensions", the MOMR said.

Opec also left its oil supply projections for 2023 unchanged. It estimates non-Opec supply will grow by 1.5mn b/d to hit 67.2mn b/d, with most of the increase coming from the US, Norway, Canada, Kazakhstan and Guyana.

It sees Russian oil supplies, which are under strain due to western oil embargoes and the G7-led oil price cap, dropping by 850,000 b/d this year. This would leave Russian liquids output at 10.18mn b/d, down from 11.03mn b/d in 2022, although it noted that the "forecast remains subject to high uncertainty".

The group puts the call on its own members' crude at 29.2mn b/d this year, unchanged from last month. Argus estimates Opec crude output was 29.03mn b/d in December.

The wider Opec+ group is not scheduled to hold a ministerial meeting to discuss output policy until 4 June, but the group's Joint Ministerial Monitoring Committee meets on 1 February where it will assess market fundamentals.

By Aydin Calik