OPEC cuts oil demand outlook as it starts to curb production

OPEC reduced its forecasts for global oil demand again as the group implements production cutbacks aimed at keeping markets in balance.

Due to a weaker economic backdrop and China's strict anti-Covid measures, the Organization of Petroleum Exporting Countries lowered estimates for the amount of crude it will need to pump this quarter by 520,000 barrels a day, following a similar-sized downgrade a month ago.

This means the supply cut of two million barrels a day agreed by the group and its allies last month -- drawing fierce criticism from U.S. President Joe Biden -- should bring output down to levels that balance markets, even if the reductions are not fully implemented, the report indicated.

“The significant uncertainty regarding the global economy, accompanied by fears of a global recession, contribute to the downside risk for lowering global oil demand growth,” OPEC's Vienna-based research department said in its monthly report. China's Covid-zero policy “adds to this uncertainty.”