OPEC reduces 2023 oil demand by 1 lakh bpd to 29 mbpd, Saudi output cut leads to 3 mbpd shortfall
The Organisation of Petroleum Exporting Countries (OPEC), in its latest monthly oil market report for September, has revised down the global oil demand for 2023 by 1 lakh barrels per day to 29.2 million barrels per day (bpd) – which is 8 lakh bpd higher than 2022. The oil cartel has also cut the 2024 demand outlook by 1 lakh bpd to 30 mbpd. The report comes days after Saudi Arabia and Russia, two of the most prominent members of OPEC and its allies (OPEC+) extended their voluntary oil supply cuts of 1.3 mbpd till the end of the year.
Global oil markets face a supply shortfall of more than 3 mbpd in the next quarter — potentially the biggest deficit in more than a decade — as a result of Saudi Arabia’s extended output cuts. The latest data published by OPEC show why the kingdom’s supply squeeze, amid a period of record demand, has sent oil prices surging beyond $90 a barrel.
OPEC+ has pumped an average of 27.4 mbpd so far this quarter, or roughly 1.8 million less than it believes consumers needed, according to the OPEC report. If the organization keeps output unchanged, as group leader Saudi Arabia has signaled it plans to do, the gap between supply and demand will almost double in the final three months of the year.
OPEC estimates it needs to provide 30.7 mbpd in the fourth quarter to fulfill consumption in the oil market. OPEC and its allies are due to meet on November 26 to review the production policy for the year ahead.
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Updated: 12 Sep 2023, 06:36 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.