RIYADH: As the world grapples with economic challenges, global oil consumption is expected to rise further year-on-year by 2.16 million barrels per day to reach 99.89 mbd in 2022, said King Abdullah Petroleum Studies and Research in its latest outlook for the fourth quarter of 2022.
This is a slight upward revision of 10,000 bpd from its previous forecast for Q3 2022.
“These revisions reflect healthy reports from several countries on road, air and maritime activity, and slowing economic activity in others, through 2022,” the report titled KAPSARC Oil Market Outlook reads.
He noted that the decline in gross domestic product growth in the fourth quarter of 2022 will add downward pressure on the underlying seasonality of oil demand trends in several countries, playing an important role in lowering oil demand. oil demand this quarter.
As of the third quarter of this year, KAPSARC said global oil demand had finally caught up to pre-pandemic levels. “Overall, we expect quarterly OECD consumption growth of around 640 kbpd, while non-OECD oil demand growth is expected to decline by around 120 kbpd.” , says the quarterly report.
The report further notes that year-on-year growth demand from Organization for Economic Co-operation and Development countries will contribute 960 kb/d to overall demand growth in 2022.
Given the challenging GDP forecasts for the first half of 2023 for several OECD countries, KAPSARC said OECD demand in 2023 is only expected to increase by another 520 kbpd.
For 2022, the OECD Americas, led by the United States, will carry 490 kbpd of this year’s growth, he said. While Europe will follow with growth of 320 kbpd, with the UK accounting for 40% of OECD Europe’s demand growth.
The report notes that the remaining growth is expected to come from OECD Asia-Oceania, with South Korea accounting for around 50% of the region’s growth. Non-OECD demand growth is expected to reach 1.20 mbpd this year and 1.39 mbpd next year.
KAPSARC has revised its projection of previous Chinese demand growth to 90 kbpd due to weaker GDP growth projections, with weaker transport activity accompanying its continued strict zero-COVID-19 strategy.
Regarding non-OECD countries, the KAPSARC report brought significant changes in Saudi Arabia with an upward revision to growth of 180 kbpd in 2022. “While GDP growth plays an important factor in the oil demand growth estimate, we notice that activity has almost doubled since last year and maritime activity has continued to increase,” the report notes.
The Saudi advisory think tank said in its outlook report that global oil demand growth will continue its recovery from COVID-19 until 2024.
On the supply side, the KAPSARC report predicted that the world would see net global growth of 230 kbpd this quarter. However, he noted that the Organization of the Petroleum Exporting Countries and its allies concluded their 33rd OPEC and non-OPEC ministerial meeting on October 5 and agreed “to adjust overall production downwards by 2 mbpd against required production levels of August 2022, starting in November 2022.
This means that OPEC+ will see an overall decline of 465 kbpd quarter over quarter, bringing global production down to just 400 kbpd.
“Despite healthy growth from non-OPEC+ producers, they are expected to stagnate this quarter at just 65 kbpd. to peak in the third quarter and then decline in the fourth quarter,” the report noted.