BAKU, Azerbaijan, February 15. OECD Europe's oil demand is expected to rise by 30,000 barrels per day (b/d) in the first quarter of 2023, Trend reports via monthly oil outlook from OPEC.
According to OPEC, this growth is due to an increase in aviation fuel demand, as well as an expected rise in road traffic. At the same time, in the first quarter of the current year, regional GDP growth is forecast to slow down further year-on-year, however, is expected to remain positive.
"Risks, however, remain skewed to the downside, hinging on geopolitical and economic developments in the region. The ongoing supply chain bottlenecks, exacerbated by the geopolitical developments in the region, will likely continue to affect the manufacturing and petrochemical sectors of the region," the report noted.
Meanwhile, OECD Europe has been seeing a year-on-year decrease in oil demand for three months straight. Although, November 2022 decline of 0.3 mb/d was a bit of an improvement, compared to October decrease of 0.9 mb/d.
"The region has been facing daunting challenges, partly due to ongoing geopolitical developments, coupled with inflation and slowing economic activity, which continue to weigh on oil demand in the region. On a positive note, aviation fuel increased year-on-year by 0.2 mb/d in November as airline activity continued to improve. Residual fuels also grew, rising by 90,000 b/d year-on-year in November. Gasoline posted year-on-year growth of 60,000 b/d in November following two months of annual decline," OPEC said.
At the same time, diesel fuel contracted by 0.3 mb/d year-on-year in November, mainly because of slow down in manufacturing and trucking activity.
"Industrial production decelerated slightly, increasing by 1.9 percent year-on-year, compared with 2.8 percent year-on-year growth in October. At the same time, the Manufacturing and Services PMI stood at 47.1 and 48.5 in November, respectively, which is below the 50 threshold of expansion, and the services PMI stood at 48.5. Lower demand from the European petrochemical industry has been affecting feedstock in the region. Accordingly, naphtha and LPG declined by 0.25 mb/d and 20,000 b/d, year-on-year, respectively. Finally, the "other products" category also declined by 80,000 b/d, year-on-year," the report added.