In its September Monthly Oil Market Report (MOMR) published today, OPEC made no changes in its economic growth estimates and sounded an upbeat note about the trend of the global economy for 2022 and 2023.
The cartel expects the global economy to grow by 3.1% both this year and next, and although it revised down its estimate of the Eurozone economy, OPEC still sees 3.1% growth in 2022 and 1.7% increase in the euro area in 2023. That’s contrary to recent forecasts from analysts and economists who expect the Eurozone and several EU member states to be plunged into recessions as early as this year due to soaring energy prices weighing on inflation, industries, and consumer sentiment.
“Economies like India and the Euro-zone showed a strong growth dynamic in 1H22, compensating very well for the relatively — and likely temporary — weaker performance of the US and China,” OPEC said in its MOMR on Tuesday.
Looking at 2023, the cartel noted that “Despite the obvious downside risks, there is also upside potential to the global economic growth forecast. Fiscal measures in the EU and China support growth towards the end of the year and lead to the potential continuation of a stable dynamic in 2023.”
As a result of the expected robust economic growth, oil demand will continue to rise, especially driven by the recovery in travel and transportation, OPEC said. This is forecast to lead to robust overall growth in oil demand of 3.1 million barrels per day (bpd) in 2022 and 2.7 million bpd in 2023, surpassing the pre-COVID-19 levels, to stand at an average 102.7 million bpd next year.