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Saudi Arabia’s oil demand growth will moderately slow to 20,000 bpd in 2023 (KAPSARC report)

RIYADH: Saudi Arabia is expected to keep oil demand growth moderately low at 20,000 bpd in 2023 compared to forecast demand growth of 24,000 bpd this year, as the Kingdom continues on its path to energy efficiency, limiting oil demand, according to a report by the King Abdullah Petroleum Studies and Research Center.

The report titled “KAPSARC Oil Market Outlook Q3” predicts that the Kingdom is expected to see demand growth of 380,000 bpd quarter-on-quarter in the third quarter.

Total global oil consumption is expected to rise by 2.15 million bpd year-on-year in 2022 to 99.8 million bpd as the world recovers from the pandemic, he added.

The KAPSARC report, however, noted that this projection is 320,000 barrels lower than its previous projection made in the second quarter of 2022.

“Consumption growth is led by Saudi Arabia, with an additional 380,000 bpd expected for cooling and power generation, followed by the United States with an expected growth of 320,000 bpd due to its cooling season. summer driving,” the report said.

He predicted that global oil consumption would increase by an additional 2.16 million bpd in 2023, 30,000 bpd higher than KAPSARC’s previous projection made during the second quarter.

“Despite great uncertainty in oil markets, a reduction in supply expected from Russia and a reduction in global demand since our previous quarterly outlook, we expect oil supply growth to continue in 2022, with production close to parity with demand in 2022 and exceeding in 2023,” KAPSARC said in the report.

He added: “While the current high oil prices should encourage more production and less consumption, supply risks are largely on the upside and demand risks are mostly on the downside, which would lower prices. price.”

As for supply balance sheets, the report projects significant quarterly growth of 1.61 million bpd in Organization for Economic Co-operation and Development countries for the third quarter.

KAPSARC, however, noted that oil demand growth in non-OECD countries is expected to slow in the third quarter to around 250,000 bpd.

According to the report, supply will grow by 2.2 million bpd in the third quarter of 2022, the highest level of quarter-over-quarter growth in several years.

Production growth for the third quarter, however, is only expected to be 870,000 bpd, and surprisingly, non-OPEC+ will account for 68% of that production growth.

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