Commentary
In the past three months, oil prices have corrected dramatically as global oil demand has eased and concerns about a Chinese slowdown have added to a possible European recession. The picture of demand growth may be weakening, but the global supply-demand balance remains tight, and years of underinvestment may bring elevated oil prices for longer.
The Organization of the Petroleum Exporting Countries (OPEC) has “cut its 2022 forecast for growth in world oil demand for a third time since April,” Reuters reported. “It expects 2022 oil demand to rise by 3.1 million barrels per day (bpd), or 3.2%, down 260,000 bpd from the previous forecast.” The International Energy Agency (IEA), on the other hand, “raised its forecast by 380,000 bpd to 2.1 million bpd,” but it was mostly updating and moving closer to other estimates from international bodies….