OPEC cuts its oil demand outlook for 2021; still sees a large market deficit until the end of the year
Call OPEC crude oil to hit 29.57 million barrels per day in Q4
Non-OPEC supply forecasts unchanged from last month
Many members report October production below quota
Under fire for limiting production as prices rise, OPEC on November 11 lowered its forecast for global oil demand for 2021 by 160,000 bpd, citing weaker economic factors in China and India , but indicated that the market would remain tight for the remainder of the year.
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OPEC crude demand is expected to average 29.57 million b / d in the fourth quarter, well above the block’s output of 27.45 million b / d for October, the organization said. in its closely watched report on the oil market.
Even if OPEC plans to increase production together with Russia and eight other allies by a combined 400,000 bpd each month, the volumes would not be sufficient to meet global demand, the United States, Japan and India among consumer countries complaining about the group. to release more supplies.
But in the first quarter of 2022, seasonal factors will reduce OPEC’s call for crude to 26.81 million barrels per day, according to the report, and ministers said they would rather be cautious rather than aggressive on production, with a probable future market surplus. .
The alliance will then meet on December 2 to decide on January production levels.
OPEC and its allies “will continue to regularly review market conditions, reaffirming the commitment of participating countries to ensure adequate supplies and to support efforts to maintain the stability of the world oil market,” the report said.
In its analysis, OPEC noted a 12% increase in spot crude oil prices in October, attributed to “strong oil market fundamentals, compounded by expectations of higher oil demand over the months. winter of the “switch from gas to oil” “.
Lack of quotas
Strong demand as the world continues to recover from the pandemic has reduced the OECD’s commercial oil inventories to 2.805 billion barrels, about 163 million barrels below the 2015-19 average than the OPEC + alliance said aim.
However, the report pointed out that China has reinstated lockdown measures in some areas to contain the growing cases of COVID-19, while cost-conscious Indian consumers are likely to cut their oil consumption amid the surge in fuel costs. price.
As a result, OPEC now expects global oil demand to average 96.44 million b / d in 2021, for annual growth of 5.65 million b / d. For 2022, demand will increase by 4.15 million b / d, unchanged from last month’s forecast, to reach 100.59 million b / d.
Its non-OPEC production forecast remained unchanged from last month’s report, at 63.64 million b / d for 2021, up 660,000 b / d year on year, and to 66.66 million b / d. d for 2022, up 3.02 million bpd.
The report also continues to indicate that many OPEC members are struggling to meet their production quotas, which has contributed to the recent tightening of the market.
For example, Angola self-reported October crude production of 1.11 million b / d, well below its allocation of 1.36 million b / d, while Nigeria self-reported 1.23 million b / d. bpd, well below its cap of 1.63 million bpd.
OPEC mainstay Saudi Arabia said it pumped 9.78 million bpd, according to the report, just below its quota of 9.81 million bpd.