Commerzbank’s commodity analyst Carsten Fritsch has pointed out that OPEC has once again revised its forecast for oil demand downward, marking the fifth consecutive month of such adjustments.
OPEC’s Expectations for the Oil Market
OPEC now anticipates an increase of 1.6 million barrels per day in oil demand this year and 1.5 million barrels per day next year. Back in July, the corresponding forecasts were significantly higher, at 600 thousand barrels per day more for this year and 400 thousand barrels per day more for next year. The reductions in the forecasts over recent months can be seen as a gradual adaptation to the actual situation. Nevertheless, the current forecasts are still overly optimistic, suggesting that further downward revisions are likely in the months ahead.
Despite the decreased demand forecast, the oil market is projected to remain undersupplied in the upcoming year. Even if OPEC+ were to gradually boost the oil supply starting from April as planned, the situation of undersupply would persist. It appears that OPEC+ doesn’t fully trust its own forecast; otherwise, there wouldn’t have been a need to further postpone the planned production increases.
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