OPEC could lower its oil demand forecast for 2022

OPEC may downgrade its forecast for global oil demand in 2022, given increased uncertainty with the Delta variant, two OPEC + sources have said Reuters Friday.

OPEC is expected to release its Monthly Oil Market Report (MOMR) on Monday, in which it could lower its estimates of oil demand for next year, after keeping its demand outlook unchanged in the previous two reports, according to the sources.

“OPEC may revise the figures for the next monthly report,” one of the OPEC + sources told Reuters.

In its MOMR in August, OPEC said global oil demand is expected to average 96.6 million barrels per day (bpd) this year and exceed 100 million bpd in the second half of 2022, keeping its July estimates unchanged despite the resurgence of COVID in major economies, including China and the United States.

Next year, global oil demand is expected to average 99.9 million bpd and exceed 100 million bpd in the second half of 2022, OPEC said in the August MOMR. This will be thanks to massive stimulus packages that are expected to increase economic growth and expectations that the COVID-19 pandemic will be under control, supported by vaccination programs and improved treatment, according to the organization.

Just before the OPEC + meeting on September 1, the broader Russian-led alliance of OPEC and non-OPEC producers reportedly felt that the oil market would become more and more tight this year, but return to a surplus next year.

Currently, OPEC has a more optimistic view of global oil demand than the International Energy Agency. IEA warned in its August monthly report that further restrictions on mobility in Asia to combat the Delta variant were expected to slow global oil demand growth in the second half of 2021, although it left its demand growth estimates to the entire year largely unchanged.

This year’s oil market deficit would turn into a surplus, the IEA said.

“But the scale could revert to surplus in 2022 if OPEC + continues to reverse its cuts and producers not participating in the deal increase in response to the price hike,” the IEA said last month.

Its September report is due out on Tuesday, September 14.

By Tsvetana Paraskova for OilUSD

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