OPEC cuts oil demand forecasts as economic growth slows

The Organisation of the Petroleum Exporting Countries (OPEC) has further revised down its forecasts for this year`s global economic growth and oil demand, following a previous downward revision in May.

The oil alliance said on Thursday in its monthly report that the world economy is expected to grow by 3.1 per cent in 2022, compared to its forecast of 3.5 per cent in the previous three months.

Explaining the downward revision, OPEC cited "weaker second-quarter growth in the major economies and an observed soft trend in some key economies".

In its May report, OPEC had already lowered its forecast for global economic growth this year from 3.9 to 3.5 per cent. This projection was maintained until July, Xinhua news agency reported.

Risks facing the world economy include ongoing geopolitical tensions and supply chain issues, the continued Covid-19 pandemic, rising inflation, high sovereign debt levels in many regions, and expected monetary tightening by central banks in the US, Britain, Japan and the Euro zone.

The oil-producer group has also forecast that global oil demand will average around 100 million barrels per day (bpd), down from the previous months` estimate of 100.3 million bpd.

The revised oil demand forecast is due to "expectations of a resurgence of Covid-19 restrictions and ongoing geopolitical uncertainties" in the second half of this year.

According to OPEC`s August report, some of its members have continued to struggle with meeting their monthly output quotas. Nigeria and Angola fell significantly behind their production targets in July, the report showed.