OPEC: Despite declining oil prices, global demand still robust

Haitham Al Ghais, secretary-general of the Organisation of the Petroleum Exporting Countries (OPEC), says despite declining oil prices, global oil demand is still robust. 

Al Ghais made this known in an interview with Reuters on Wednesday.

Oil price had increased above $100 a barrel following the invasion of Ukraine by Russia.

However, oil price tumbled recently, hitting a six-month low (below $92) this week.

Al Ghais said the slide reflects fears of economic slowdown and obscures physical market fundamentals.

He added that he took a relatively optimistic view on the outlook for 2023 as the world tackles rising inflation.

“There is a lot of fear. There is a lot of speculation and anxiety, and that’s what’s predominantly driving the drop in prices,” he said.

“Whereas in the physical market we see things much differently. Demand is still robust. We still feel very bullish on demand and very optimistic on demand for the rest of this year.

“The fears about China are really taken out of proportion in my view.  China is a phenomenal place of economic growth still.”

Al Ghais further said it would be premature to state the oil cartel’s likely production adjustment to be made at the next OPEC+ meeting, which would hold by September 5.

He added that he was positive about the outlook for next year.

“I want to be very clear about it— we could cut production if necessary, we could add production if necessary,” the secretary-general said.

“It all depends on how things unfold. But we are still optimistic, as I said. We do see a slowdown in 2023 in demand growth, but it should not be worse than what we’ve had historically.”