OPEC on Thursday flagged downside risks to summer oil demand as part of the backdrop to shock output target cuts announced by OPEC+ producers on April 2, although the producer group maintained its forecast for global oil demand growth in 2023.
Demand will rise by 2.32 million barrels per day (bpd), or 2.3%, the Organization of the Petroleum Exporting Countries said in a monthly report. This was unchanged from last month’s forecast.
OPEC, Russia and other allies, known as OPEC+, surprised the oil market on April 2 with an announcement of new production target cuts, adding to curbs already in place.
Oil has risen towards $87 a barrel since the decision from below $80.
In a discussion on the summer market outlook, OPEC said the usual U.S. seasonal demand uptick could take a hit from any economic weakness due to interest rate hikes, and the reopening of China had yet to stop a decline in global refining intake of crude.
“It should be noted that potential challenges to global economic development include high inflation, monetary tightening, stability of financial markets and high sovereign, corporate and private debt levels,” OPEC said.
“The impact of the recent reopening of China has still not been sufficient to reverse the declining trend in global refinery intakes,” OPEC added.
The report also showed OPEC’s oil production fell in March, reflecting the impact of earlier output cuts pledged by OPEC+ to support the market as well as some unplanned outages.
OPEC said its March output fell by 86,000 bpd to 28.80 million bpd.
