Global economic growth is forecast to pick up towards the end of second quarter of the year, despite 2022 continuing to be fraught with uncertainty, the petroleum industry body said.
“The economic momentum has been building, especially in the contact-intensive services sector, which includes travel and transportation, leisure and hospitality,” Organisation of the Petroleum Exporting Countries (OPEC) said in its latest monthly report.
The global oil demand is anticipated to average 101.8 mb/d (thousand barrels per day) in the second half of this year, up from 98.7 mb/d on average seen in the first half of 2022, the report revealed.
For the year, world oil demand is forecast to grow by 3.4 mb/d. Improving mobility in major economies, as well as seasonal containment of the pandemic is projected to support gasoline and distillate demand.
“The first quarter of the year showed a weakening growth trend amid strongly rising commodity prices and a surging Omicron wave, both of which dampened the economic dynamic, particularly in the advanced economies and China,” the report said.
OPEC said it expected this renewed activity to lead into the summer holiday season of the northern hemisphere, supported by still-sufficient savings in advanced economies to be spent on pent-up demand.
It, however, said once the summer holidays were over, it would remain to be seen to what extent inflation, financial tightening and rising geopolitical uncertainty dampen the growth dynamic towards the end of the year.
The rapid containment of Covid-19 in China is expected to support a healthy rebound in economic momentum in the region, according to the report.
However, the second half of the year remains highly uncertain due to geopolitical developments in Eastern Europe.
Nevertheless, oil demand is forecast at healthy levels in the second half of this year.
In order to meet this incremental demand, the countries participating in the Declaration of Cooperation (DoC) decided in their 29th Ministerial Meeting held on 2 June 2022 to advance the planned production adjustments of September 2022 in an ongoing endeavour to ensure market stability.
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