BAKU, Azerbaijan, November 14. European oil demand is forecast to increase by a slight 0.03 million barrels per day (mb/d) annually in the first quarter of 2023, Trend reports via monthly oil outlook from OPEC.
However, as OPEC noted, regional oil demand is not expected to improve marginally, as GDP growth is expected to decline.
According to the report, a drop in oil demand in the manufacturing sector of Europe is expected in the first quarter of 2023, due to rising energy prices, geopolitical tensions and supply chain bottlenecks that are likely to continue to pressure input costs in the production sector.
Nonetheless, the expected high demand for heating in the context of the natural gas crisis will continue to facilitate the transition from gas to fuel oil, which will increase demand for distillate and fuel oil in Europe, the report noted.
As for the 2022 outlook, Europe’s oil demand is forecast to decrease by 0.05 mb/d year-on-year, at the same time, the consumption level will reach 13.90 mb/d.
The current geopolitical tensions, as well as a counter-seasonal slowdown in mobility activity during the winter, are expected to weigh on Europe’s gasoline and diesel demand in the fourth quarter of 2022, OPEC said.
“However, rising natural gas prices are expected to lead to gas-to-oil switching, particularly during the winter. Accordingly, demand for fuel oil and residuals are expected to rise due to switching. Furthermore, sustained growth in both international and regional air travel will boost demand for jet/kerosene during the fourth quarter of 2022,” the report added.