Higher prices, deteriorating economic environment start to take their toll on oil demand, says IEA
Global oil supply in June increased by 690,000 barrels per day (bpd) to around 99.5 million bpd, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday.
The IEA said Russia’s resilience despite international sanctions bolstered the world oil supply in June and helped offset outages elsewhere due to operational issues and civil unrest.
“Global output rose in June as a surprising increase from Russia along with higher US and Canadian flows more than offset steep maintenance-related losses from Kazakhstan and smaller declines from other producers,” it explained.
The daily crude oil production of the OPEC group increased to 28.74 million bpd (mbpd) in June, with a rise of about 180,000 bpd compared to the previous month.
During this period, OPEC natural gas liquids were recorded as 5.38 mbpd, raising OPEC’s total oil production to 34.12 mbpd last month.
Non-OPEC production saw a jump of around 500 million bpd to 65.34 mbpd in June.
“From June through December, world oil production forecast to grow by 1.8 mbpd to reach 101.3 mbpd. Supplies from OPEC+ are expected to rise by just 380,000 bpd over the period, with higher anticipated flows from Libya, Kazakhstan and Gulf producers offset by a deepening decline in Russian output.
“Producers outside the alliance (non-OPEC+) are set to add 1.4 mbpd, with the US dominating the gains,” the report said.
The IEA revised its global oil demand estimates for 2022 down to an average of 99.2 mbpd.
“Higher prices and a deteriorating economic environment have started to take their toll on oil demand, but strong power generation use and a recovery in China are providing a partial offset,” it said.
“A further 2.1 mbpd gain is expected in 2023, led by a strong growth trajectory in non-OECD countries,” it added.