OPEC announced this Wednesday that daily oil demand expected to drop to 2.64 million barrels. “However, risks are skewed to the downside, with growth slowing in the global economy which, if continued, is likely to lead to lower oil demand in coming months,” the document explains.
The number is placed below the 3.1 million projected in the September report. Furthermore, the announcement comes just days after the OPEC and its allies agree cut production by 2 million barrels per daythe largest reduction since the beginning of the pandemic, to avoid falling prices.
“The global economy has entered a time of heightened uncertainty and growing challenges, amid high levels of inflation, monetary tightening by major central bankshigh levels of sovereign debt in many regions, as well as ongoing supply problems,” the text adds. However, the agency expects demand in 2023 to exceed the level of 2019 prior to the pandemic.
Furthermore, the Russian president, Vladimir Putinwarned today that his country will not supply gas to oil to any country that applies caps on maximum prices of these inputs if they are of Russian origin. The European Union is debating imposing these limits at the request of several countries, while the G7 applied it for next December 5.
In addition, the Russian state pipeline monopoly transneft declared on Wednesday that it had received a notice from the Polish operator PERN about a leak in the pipeline Druzhbareported Interfax, which forced the pipe to be closed.
In the scenario of expectations, the lower growth projection published this week by the IMFwhere he expects the world economy to enter a recession next year, while the figure for united states inflation which will be announced this week and could force the policy of strong rate hikes by the Federal Reserve to deepen, contribute to the downward trend in oil.
Source: Ambito
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