BAKU, Azerbaijan, March 17. OECD Europe's oil demand in the first quarter of 2023 is expected to decrease by 70,000 barrels per day (b/d), Trend reports via monthly oil outlook from OPEC.
OPEC expected region's demand to rise by 30,000 b/d, as of the previous outlook. Despite the growth in jet fuel demand due to recovery in air travel, the forecast has been adjusted downwards.
"Oil demand was impacted by weakening macroeconomic performance and ongoing geopolitical developments in the region. Inflation softened marginally but remained high in the Euro-zone, standing at 9.2 percent in December, far above the target 2 percent inflation rate sought by the ECB's monetary policy across all Euro-zone countries combined," OPEC said.
At the same time, according to OPEC's estimations, OECD Europe liquids demand in December decreased by 0.5 mb/d year-on-year. Likewise, the demand on residual fuels increased by 120,000 b/d, due to gas-to-oil switching for winter heating demand. Gasoline demand showed a growth of 50,000 b/d year-on-year.
"Warmer-than-expected winter weather and a decline in natural gas prices also helped to depress diesel demand in the industrial and residential sectors, which posted a y-o-y decline of 0.2 mb/d in December. Similarly, weak demand for cracking and blending in the region’s petrochemical sector continues to weigh on feedstock requirements. Naphtha and LPG declined by 0.3 mb/d and 0.2 mb/d year-on-year in the month. Finally, the other products category also declined by 40,000 b/d year-on-year compared to an 110,000 b/d annual decline recorded in November," the report said.