OPEC further lowers forecasts for global economy and oil demand in 2022

Vienna, Austria | Xinhua | The Organization of the Petroleum Exporting Countries (OPEC) on Thursday further revised down its forecasts for this year’s global economic growth and oil demand, following a previous downward revision in May.

The oil alliance said in its monthly report that the world economy is expected to grow by 3.1 percent in 2022, compared to its forecast of 3.5 percent in the previous three months.

Explaining the downward revision, OPEC cited “weaker second-quarter growth in the major economies and an observed soft trend in some key economies.”

In its May report, OPEC had already lowered its forecast for global economic growth this year from 3.9 percent to 3.5 percent. This projection was maintained until July.

Risks facing the world economy include ongoing geopolitical tensions and supply chain issues, the continued COVID-19 pandemic, rising inflation, high sovereign debt levels in many regions, and expected monetary tightening by central banks in the United States, Britain, Japan and the euro zone.

The oil-producer group has also forecast that global oil demand will average around 100 million barrels per day (bpd), down from the previous months’ estimate of 100.3 million bpd.

The revised oil demand forecast is due to “expectations of a resurgence of COVID-19 restrictions and ongoing geopolitical uncertainties” in the second half of this year.

According to OPEC’s August report, some of its members have continued to struggle with meeting their monthly output quotas. Nigeria and Angola fell significantly behind their production targets in July, the report showed.