In its latest monthly report, OPEC revised won its estimate of global oil demand growth for 2022 by 460,000 barrels per day (bpd), citing China's Covid lockdowns, economic headwinds in developed economies, and inflationary pressures everywhere. OPEC now sees world oil demand growing by 2.6 million bpd this year to average 99.7 million bpd. The cartel also cut its required production in the fourth quarter by 440,000 barrels a day.

Similarly, OPEC also slashed its oil demand growth forecast for 2023, by 360,000 bpd, expecting growth at 2.3 million bpd next year. Demand growth would be "subject to headwinds given the uncertainty that surrounds the global economic outlook and factors related to the pandemic," OPEC said.

"Global economic growth has entered into a period of significant uncertainty and deteriorating macroeconomic conditions, amid intensifying challenges including high inflation levels, tightening monetary policies by major central banks, rising interest rates and persisting supply chain issues," the oil producing cartel added.

"Risks are skewed to the downside, with slowing growth in the global economy," OPEC's Vienna-based research department said in the report. Combined with "a possible resurgence of Covid restrictions in China and elsewhere," the oil market may miss out on the typical seasonal uptick in consumption, it piled on to justify its output cut.

Separately, output from OPEC's 13 members rose by 146,000 barrels a day to 29.77 million a day in September as they implemented a symbolic hike announced after Biden's visit to the kingdom this summer, according to the report. Still, most members fell significantly short of their production targets as they wrestle with under-investment and operational disruptions.