OPEC producers will increase crude production in 2023 to balance supply and demand

By : Franyi Sarmiento, Ph.D., Inspenet, July 19, 2022

OPEC producers will have to pump crude at the fastest rate in five years; in 2023, if they want to balance oil supply and demand. Capacity limitations suggest they may struggle.

The latest forecasts from the International Energy Agency, the US Energy Information Administration and the Organization of the Petroleum Exporting Countries show that global oil demand will rise strongly again in 2023, despite growing fears about rising inflation and weakening economic growth. The lack of investment for new crude production capacity means the OPEC group of producers will need to pump more to meet that demand.

Mentee Robotics presents a new humanoid robot with AI

NASA and JAXA sign agreement for a Japanese lunar rover

Sierra Space develops delivery system from Earth orbit

Delta: the ring-shaped drone that flies and rolls

Centauri-6 satellite launched as part of SpaceX mission

 

All three forecasters see global oil demand rising by at least 2 million barrels a day next year, taking it above the 2019 level for the first time since the Covid-19 pandemic hit in early 2020.

Producer group forecasters are more optimistic about oil demand than their counterparts at the IEA and EIA. Combining growth estimates for 2022 and 2023, they see an increase over the two years of more than 6 million barrels per day. That compares with 3.9 million barrels per day seen by the IEA and 4.3 million barrels per day by the EIA.

The latest OPEC report assumes major economies “return to their growth potential.” However, he does note that uncertainties around his forecast “remain on the downside.”

OPEC expects the growth to bring global oil demand to 103 million barrels per day on average in 2023. The IEA and EIA see the figure at 101.3 million barrels and 101.6 million barrels per day, respectively.

Combining non-OPEC demand and supply prospects, OPEC’s 13 members will need to deliver more than 30 million barrels per day on average in 2023, according to OPEC and the IEA. The EIA outlook puts the figure at 29.4 million barrels per day.

That’s not a record production level for the group, but it would be the highest since 2018, according to OPEC’s own figures. More importantly, it would bring the group’s spare capacity to a multi-year low of around 2 million barrels a day, according to Bloomberg’s assessment of sustainable production capacities in OPEC countries.

Source : https://petrobanca.com/la-opep-enfrenta-una-tarea-de-produccion-casi-imposible-el-proximo-ano/