OPEC Brent crude oil price forecast: The recent drop in oil prices reflects fears about slowing economic growth, which overshadows the true fundamentals of the physical market, Haisam al-Gais, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), told Reuters. Al-Gais is optimistic about the prospects for the oil market in 2023 as the world gradually manages to contain inflation.

According to al-Gais, who took over as cartel secretary-general on Aug. 1, demand in the physical oil market is quite strong and fears of a slowdown in the Chinese economy are exaggerated. In addition, higher tourist activity and, consequently, higher jet fuel consumption will boost demand.

OPEC oil barrel price

In March, oil barrel prices OPEC approached a historical maximum of $147 after the start of Russian military special operation in Ukraine, which increased concerns about the shortage of supply. Prices later declined to a 6-month low below $92 a barrel this week.

“Markets are gripped by fear,” al-Gais noted in an online interview. – “(There is) speculation and anxiety in trading, and that is what is causing prices to fall.

“In the physical market, however, the situation is very different. Demand is still high. We remain positive on demand forecasts and are extremely optimistic about the demand outlook for the rest of the year,” he added.

“The anxiety about (the) Chinese economy is, in my opinion, excessive,” said al-Gais, who worked in the PRC for four years at the dawn of his career. “China is still a phenomenal example of economic growth,” he added.

OPEC+, which includes Russia, has restored production after a record cut during the coronavirus pandemic in 2020. Following a recent meeting, the alliance agreed to increase production by 100,000 barrels per day in September.

The next meeting is Sept. 5, and according to the OPEC secretary general, it is too early to talk about possible decisions by the alliance. However, al-Gais is positive about the prospects for 2023.

Meanwhile, while commodity markets are unstable, the stock market is also suffering. Tech companies are particularly hard hit. Meta stands out among the rest. Facebook meta stock price have lost 65% of their value over the year. Zuckerberg owns 350 million shares of the company, which means that his personal wealth has dropped significantly. Two years ago, Zuckerberg’s fortune was $106 billion; when Facebook stock rose to its all-time high of $382 last September, his personal fortune had risen to $142 billion.

Earlier, we reported that oil prices were declining after rising the day before.