OPEC cut its forecast for the growth of the world’s oil demand for this year and next in its Monthly Oil Market Report (MOMR), which was released on Monday. This is the fifth time since April that the Organisation has cut its consumption forecasts.

Due to China’s continuing strict COVID policy and the economic difficulties in Europe, OPEC reduced its estimates for both 2022 and 2023 oil demand growth by 100,000 barrels per day (bpd).

In the release, OPEC said: “The significant uncertainty regarding the global economy, accompanied by fears of a global recession contributes to the downside risk for lowering global oil demand growth. In addition, China’s strict adherence to the ‘zero COVID-19 policy’ adds to this uncertainty, making the country’s recovery path even more unpredictable.”

OPEC lowered its global oil demand growth projections for 2022 and 2023 in October, a week after announcing a 2-million-bpd headline reduction to its collective oil production objective. These predictions have now each been reduced by 100,000 bpd. Following a nearly 400,000 bpd reduction in demand predictions for the fourth quarter, OPEC now projects 2.5 million bpd rise in global oil demand in 2022.

Global oil demand is anticipated to reach an average of 99.6 million bpd in 2022, with developed economies in the Americas experiencing the largest increases, led by the United States on the strength of improving gasoline and diesel demand, the cartel said. This year, the demand for light distillates is also anticipated to increase, according to OPEC.

According to OPEC, the increase in oil demand for 2023 will be 2.2 million bpd, which is 100,000 bpd less than the increase predicted in the report from October. Global oil consumption is anticipated to be 101.8 million bpd on average, “supported by expected geopolitical improvements and the containment of COVID-19 in China.”

As a result of a rebound in the demand for transportation fuels and light distillates, it is anticipated that US consumption will surpass 2019. The cartel claimed that consumption in OECD Europe and the Asia Pacific region is not anticipated to increase beyond 2019 levels.