OPEC has revised its forecast for oil demand downwards for the fifth month in a row, Commerzbank’s commodity analyst Carsten Fritsch notes.

OPEC expects oil market to remain undersupplied

“OPEC now expects an increase of 1.6 million barrels per day this year and 1.5 million barrels per day next year.”

“In July, the corresponding forecasts were still a good 600 thousand and 400 thousand barrels per day higher. The forecast reductions in recent months represent a gradual adjustment to reality. However, the current forecasts are still far too optimistic, meaning that further downward revisions are likely to follow in the coming months.”

“Despite the lowered demand forecast, the oil market would continue to be undersupplied in the coming year, even if OPEC+ were to gradually increase the oil supply from April as planned. OPEC+ does not appear to believe the forecast, otherwise the decision to further postpone the planned production increases would not have been necessary.”