IEA Slightly Upgrades 2022-2023 Global Oil Demand Growth Forecasts: Report

MOSCOW (Sputnik) - The International Energy Agency (IEA) has slightly upgraded its forecasts for the global oil demand growth to 99.9 million barrels per day in 2022 and to 101.6 million barrels per day in 2023, according to its fresh report published on Wednesday.

"In view of this recent resilience, our forecasts for global demand growth have been increased compared to last month’s Report. Estimates for 2022 and 2023 have been revised up, by 140 kb/d to 2.3 mb/d year-on-year (y-o-y) (reaching 99.9 mb/d), and by 100 kb/d to 1.7 mb/d y-o-y (reaching 101.6 mb/d), respectively," the report read.

In the November report, the agency expected the demand to grow by 2.1 million barrels per day to 99.8 million barrels per day in 2022 and by 1.6 million barrels per day to 101.4 million barrels per day in 2023.

The production of crude oil and condensates in Russia increased by 90,000 barrels per day in November and reached 11.2 million barrels per day, the report read.

"Crude oil supply from Russia rose 90 kb/d to 9.81 mb/d in November – lifting total supply of crude oil, condensates and NGLs to 11.2 mb/d, just 200 kb/d below pre-invasion levels. Higher output from the Sakhalin-1 project – now operated by Rosneft, which replaced Exxon – reportedly drove the increase," the report read.

With the EU ban on Russian crude imports and a G7 price cap on Russian seaborne crude exports already in effect, the agency believes "Russia may be forced to shut in ~400 kb/d of total oil in December, with more losses anticipated in 1Q23 after the EU bans Russian product imports."

The International Energy Agency has upgraded its forecast for the global oil production growth in 2022 and expects it to rise by 4.7 million barrels per day to 100 million barrels per day, according to the report.

"For 2022 as a whole, global oil supply is forecast to rise by 4.7 mb/d year-on-year (y-o-y) to 100 mb/d. Saudi Arabia is set to rank as the world’s single largest source of growth (+1.6 mb/d), boosting production to an annual record rate," the report read.

The agency also upgraded its forecast for the oil output in 2023 and expects it to rise by 700,000 barrels per day to 100.8 million barrels per day.

The commercial oil storks in the Organization for Economic Co-operation and Development (OECD) increased by 17.3 million barrels in October month-on-month to 2.745 million barrels, which is by 150.2 million barrels lower than the five-year average, the report read.

"Global observed inventories fell by 23.2 mb in October as product stocks fell for the first time since March and crude oil saw a smaller build. OECD industry stocks increased by 17.3 mb, to 2 765 mb," the report said.

The total stocks were below their five-year average by 150.2 million barrels, the IEA report added.

OPEC+ has failed to ensure oil production growth necessary under the alliance's oil output cut deal in November, producing 1.72 million barrels per day less, the International Energy Agency said.

"The overall supply target for the 19 members bound by quotas dropped by 2 mb/d in November to 40.1 mb/d and is due to remain in place through the end of next year. Production from those members fell by 480 kb/d to 38.38 mb/d last month. The lower supply target has meanwhile narrowed the gap between the bloc’s supply and official quotas to 1.72 mb/d from 3.2 mb/d in October," the report read.

OPEC+ unanimously agreed in October to take 2 million barrels of oil per day off the market, starting November, in response to uncertainty in global energy markets.