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OPEC on Thursday cut its forecast for growth in world oil demand in 2022 for a second straight month, citing the impact of Russia’s attack on Ukraine, rising inflation and the resurgence of the Omicron coronavirus variant in China.
In a monthly report, the Organisation of the Petroleum Exporting Countries (OPEC) said world demand would rise by 3.36 million barrels per day (bpd) in 2022, down 310,000 bpd from its previous forecast.
The Ukraine conflict sent oil prices briefly above $139 a barrel in March, the highest since 2008, worsening inflationary pressures. OPEC has cited suggestions that China, with strict COVID-19 lockdowns, is facing its biggest demand shock since 2020 when oil use plunged.
“Demand in 2022 is expected to be impacted by ongoing geopolitical developments in Eastern Europe, as well as COVID-19 pandemic restrictions,” OPEC said in the report.
Nonetheless, OPEC still expects world consumption to surpass the 100 million bpd mark in the third quarter, and for the 2022 annual average to just exceed the pre-pandemic 2019 rate.
