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New Projection Driven By Stronger Than Expected Production In October, According To OPEC Monthly Report.
The OPEC raised its expectation for Brazil’s liquid fuels supply in 2023 by 30,000 barrels per day (bpd) to an average of 4.1 million bpd, in a monthly report published this Wednesday, 13. The result represents an increase of 400,000 bpd compared to the previous year, and is influenced by ‘stronger than expected’ production seen in October, the cartel claims.
In its monthly report published this Wednesday, 13, the Organization of the Petroleum Exporting Countries (OPEC) stated it expects even higher production in the fourth quarter of this year, due to the opening of new units, improvement in the performance of existing assets, and few maintenance events.
OPEC Maintains Expectation For Increase In Oil Production In 2024
For 2024, the Organization of the Petroleum Exporting Countries (OPEC) maintained its expectation of an increase of 120,000 barrels in the annual comparison, reaching 4.2 million bpd. Brazilian production fell by 135,000 bpd in October, to an average of 3.5 million bpd. Meanwhile, liquefied natural gas production remained practically stable at 80,000 bpd and is expected to continue this way in November.
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Liquid Fuels Production And Economic Outlook
The total liquid fuels production in Brazil declined by 134,000 bpd in October, to an average of 4.3 million bpd. According to OPEC, the numbers still represent a strong level of Brazilian production, as they remain close to the record level reached in September of 4.4 million bpd. In addition, the cartel maintained its forecast for Brazil’s Gross Domestic Product (GDP) growth in 2023 at 2.5%, according to the monthly report. For 2024, the expectation is for a GDP growth of 1.2% in Brazil.
Outlook For Economic Growth And Inflation In Brazil
According to OPEC’s monthly report, Brazil’s economic growth is expected to remain stable until the end of this year, despite recent data from the fourth quarter suggesting ‘a slight slowdown’. The cartel predicts that the strength of activity will reside in robust domestic demand and the industrial sector, noting positive signs in the recovery of purchasing managers’ indices (PMI), acceleration in consumer confidence, and a slowdown in inflation. For 2023, the forecast is that inflation will slow to around 4% and stabilize around 3.5% in 2024 – both below previous forecasts of 5% and 4%, respectively, suggesting ‘a favorable price trajectory.’
Forecast For Interest Rates And Fiscal Discipline
Despite projecting a slowdown in inflation and continued interest rate cuts by the Central Bank of Brazil, OPEC raised its forecast for the Selic rate at the end of 2024, from 8% in the September estimates to 10%. The change suggests that the cartel expects a slower pace in the reduction of Brazilian interest rates over the next year, although it maintains the expectation that rates will end 2023 at 12.25%. OPEC warns that ‘there is a note of uncertainty related to fiscal discipline’ and assesses that this factor implies uncertainties for the economic scenario as well.
Source: CNN Brazil
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