High fuel prices cause OPEC to slash its forecast for oil demand growth in 2023, report says

• OPEC is lowering its global oil demand projection for 2023, Reuters first reported
• The cartel sees demand growing by 2 million barrels per day or less next year, down from growth of 3.36 million bpd in 2022.

OPEC expects oil demand growth to slow sharply in 2023 as record-high gas prices pressure the global economy, Reuters first reported.

The cartel will publish its official forecast for 2023 in July, and sources told Reuters that OPEC will project demand growth of 2 million barrels per day or less, significantly lower than the expected expansion of 3.36 million bpd in 2022.

OPEC sources also told Reuters that they expect demand destruction will hit oil consumption in coming months.

The downgrade comes as consumers are paying more than ever before at the pump, with AAA reporting a national average gas price of $5 per gallon. The Biden administration is struggling to bring prices down in the US, while Europe moves away from a strong dependence on Russian crude in light of the Kremlin's continuing war campaign on Ukraine.

OPEC agreed earlier this month to ramp up its schedule of gradual increases, but the boost isn't seen having much effect on crude prices.

OPEC's original forecast for 2022, published in 2021, expected 3.28 million bpd of demand growth. OPEC later raised its expectation to 4 million bpd before lowering it once more to 3.36 million bpd.

The International Energy Agency is set to publish its own 2023 demand growth projections on Wednesday.