OPEC said on Tuesday that global demand will continue to outstrip supply in its outlook for the year ahead, as member countries struggle to increase flows.
In the cartel’s first forecast for 2023, demand is expected to increase by 2.7 million barrels per day, while supplies from non-OPEC sources are expected to increase by 1.7 million barrels per day.
To close the gap, OPEC is expected to increase production to 30.1 million barrels a day next year, 1.38 million barrels more than it pumped in June. OPEC already plans to continue ramping up production this year, but hasn’t even met those quotas, dampening hopes of a production increase that will match next year’s demand.
The forecast comes as President Joe Biden begins a trip to the Middle East on Wednesday. During a stopover in Saudi Arabia, he is expected to pressure the de facto leader of OPEC to increase production to ease price pressures in the United States.
But Saudi Arabia and other major producers like the United Arab Emirates have little spare production capacity to boost supply. Meanwhile, OPEC member Libya has seen production plummet amid political unrest, while Angola and Nigeria have lost capacity due to severe underinvestment and technical issues. affecting operations.
With little additional supply from OPEC, oil inventories in industrialized countries fell to 312 million barrels, below the five-year average.
Yet crude oil prices have soared to record highs in recent weeks as fears of
weigh. On Tuesday, West Texas Intermediate, the US benchmark, slipped 5% to $98.76 a barrel.