European economy weakens oil demand growth in region - OPEC

Oil Materials 13 August 2022 12:57
Baku, Azerbaijan Trend News Agency Maryana Akhmedova
European economy weakens oil demand growth in region - OPEC

European oil demand in the third and fourth quarters of 2022 is expected to grow by 0.3 million barrels per day year-on-year each, Trend reports, citing the latest oil market update from OPEC.

“After recording 1.2 million barrels per day in the first quarter of 2022 and 0.7 million barrels per day in the second quarter of 2022, the growth in the second half of the current year is expected to be lower, aside from the seasonal swing in gasoline, and jet kerosene demand. The surging oil product prices, manufacturing inflation, and geopolitically induced trade-related bottlenecks are expected to weigh heavily on manufacturing sectors, with multiplier effects on oil demand,” the report said.

As OPEC noted, albeit these challenges, the economic growth outlook for Europe is rather optimistic. The GDP in the region is expected to improve by 3.2 percent “combined with expected improvements in trade-related supply chain activities, which will support productive activity in the region”.

“This will boost the demand for distillates for manufacturing sector requirements. Furthermore, the pent-up travel demand amidst summer driving activity is expected to enhance gasoline and jet kerosene demand,” the report added.

Meanwhile, Oil demand in OECD Europe remained flat in May at 1 million barrels per day year-on-year, compared to the same growth rate in April. Demand in May was strongly supported by aviation kerosene, as air transport in OECD countries in Europe demonstrated significant international and regional growth, OPEC noted.