Opec cuts forecasts as economic outlook weakens

Opec trimmed its forecasts for global oil demand on Monday, as the outlook for the economy darkened.

Publishing its latest monthly report, the oil cartel forecast that global demand for oil would grow by 2.55m barrels per day in 2022, 100,000 bdp lower than its previous forecast. It also reduced forecasts for growth in 2023 by 100,000 bpd, to 2.24m bpd.

Opec said: "The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter.

"Downside risks including high inflation, monetary tightening by major central banks, high sovereign debt levels in many regions, tightening labour markets and persisting supply constraints."

It added that "other uncertainties" included geopolitical risks and the course of the Covid-19 pandemic in the northern hemisphere during winter.

Opec did, however, leave its forecast for global economic growth unchanged, at 2.7% and 2.5% for 2022 and 2023 respectively.

Opec and its allies, including Russia - known as Opec+ - will set production targets when they next meet on 4 December.

At the last meeting in October, members agreed a bigger-than-expected cut in production targets, prompting an angry response from Washington and sending oil prices sharply higher. President Joe Biden had urged Opec+ not to curb production amid already tight global supplies.