Opec upgraded its oil demand growth forecast for 2023 and said "exaggerated negative sentiments" explain the recent slide in oil prices.
In its Monthly Oil Market Report (MOMR), published today, Opec revised up its 2023 oil demand growth forecast by 20,000 b/d from last month to 2.46mn b/d. This was mainly driven by third and fourth quarter upgrades to China's oil demand growth, which Opec now sees at 1.14mn b/d in 2023, up by 70,000 b/d.
"Recent data confirm robust major global growth trends and healthy oil market fundamentals," it said.
Opec said China's crude imports increasing to 11.4mn b/d in October and remained on track to reach a record this year, "despite the overblown negative sentiment" regarding the country's oil demand. It said India's crude imports will pick up in the fourth quarter to reach a record high this year.
Opec revised up its fourth quarter global oil demand forecast by 150,000 b/d compared with last month, to 103.28mn b/d. It kept its 2024 oil demand growth forecast unchanged at 2.25mn b/d.
The group said the recent fall in oil prices was "mainly driven by financial market speculators" that "sharply reduced their net long positions over the month of October, compared to the late September."
Front month Ice Brent has been on a downward spiral in the past few weeks, falling from around $93/bl in mid-October to around $82/bl as of midday London time today.
The group increased its non-Opec liquids supply growth forecast for this year by 100,000 b/d and once again upgraded its supply forecast for Russia. It now sees non-Opec liquids supply rising by 1.78mn b/d this year, compared with a 1.68mn b/d increase in last month's forecast.
The revision was mainly driven by upgrades to Russian, US and Brazilian supply, partly offset by downward revisions from Canada and Norway.
Opec expects sanctions-hit Russia to produce 10.61mn b/d of liquids in 2023, 80,000 b/d more than in last month's projection. It forecasts Russian supply will remain at 10.61mn b/d next year.
Opec's call on its members' crude was revised down by 50,000 b/d in 2023 and 2024 to 29.08mn b/d and 29.88mn b/d, respectively. The group produced 27.9mn b/d of crude last month, up by 80,000 b/d from September, according to an average of secondary sources that includes Argus.
