In a monthly report, “World oil demand would rise by 3.67million barrels per day (bpd) in 2022, down 480,000 bpd from its previous forecast” said Organization of the Petroleum Exporting Countries (OPEC).
On Tuesday OPEC cuts the forecast for growth in world oil demand in 2022 citing the impact of Russia’s invasion of Ukraine, high inflation as crude prices soar and the rising of the Omicron coronavirus variant in China.
Due to Russia-Ukraine war in February the oil prices went above $139 for a barrel, the highest since 2008, worsening inflationary pressures. Crude fallen since as the United States and other countries announced plans to tap strategic oil stocks to boost supply, but remains over $100 for a barrel.
“While it is forecast that both Russia and Ukraine will be facing declension in 2022, the rest of the world economy will be thoroughly impacted as well,” OPEC said in the report.
OPEC’s report shown the output in March rose by just 57,000 bpd to 28.56 million bpd, lagging the 253,000 bpd rise that OPEC is allowed under it’s deal. The organization expects, there will be an increase in U.S. oil supply by 880,000 bpd in 2022, up from 670,000 bpd past month, and said there was potential for further expansion even though most U.S. oil companies are still focusing on capital discipline.