OPEC’s demand forecast drags crude oil prices down

Brent and the West Texas Intermediate (WTI) crude oil fell Tuesday evening, as the Organization of Petroleum Exporting Countries (OPEC) projected slow growth in demand for the commodity in 2023.

The brent crude oil, which is a global benchmark for internationally traded crude oil supplies, depreciated by -7.11%, falling below $100 per barrel, to trade at $99.49 after business hour.

Its counterpart in the United States, WTI, also reported a decline in price, dwindling by -0.20% to $95.65 per barrel, mirroring the brent crude oil movement in the global market.

Tuesday’s fall trailed comment from OPEC, disclosing that demand for the brent oil would dip going into next year, with the oil cartel expecting demand to grow by 2.7 million barrel per day (bpd), below this year’s 3.36 million bpd.

Although, in its Monthly Oil Market Report (MOMR) published on Tuesday, OPEC forecast a record high of 103 million barrel per day in 2023, citing various reasons for the optimistic view.

OPEC said coronavirus containment in China, major consuming nations recording solid growth, as well as improved geopolitical developments are factors that will drive oil demand up next year, adding that the impact of the Ukraine and Russia war on global economy will not be major.

It was gathered that the average oil demand for 2023 will surpass the 100.29 million bpd projected for 2022, with Q4 next year reaching about 105.4 million barrel per day.

“Nevertheless, uncertainty to the forecast remain to the downside, with much depending on the course of the pandemic and related measures, global financial tightening in the light of growing inflation, and the resolution of the ongoing geo-political issues in Eastern Europe.” OPEC said