OPEC cuts oil demand forecast for 2021

OPEC expects global oil demand this year to increase 5.8 million barrels per day (bpd) from low levels in 2020, down from last month’s estimate of annual growth of 5.96 million bpd.

In his closely watched Monthly Oil Market Report (MOMR) On Wednesday, the cartel kept its oil demand growth forecast for 2022 unchanged at 4.2 million bpd against an average total global demand of 100.8 million bpd next year.

OPEC last month raised its oil demand forecast for 2022 by 900,000 bpd, expecting the Delta variant surge to partially delay the recovery in oil demand next year with robust economic growth and a stronger recovery in fuel consumption.

In this month’s report, OPEC lowered its estimate for 2021 due to lower than expected actual data for the first three quarters of the year and “despite healthy oil demand assumptions for the last quarter of the year ”.

Global oil demand in the fourth quarter will be driven by a seasonal increase in demand for petrochemicals and heating, as well as the potential switch from natural gas to petroleum products due to high gas prices, the cartel noted.

In recent weeks, there has been growing interest in switching from gas to oil, and “If this trend continues, fuels such as fuel oil, diesel and naphtha could benefit from support, driven by demand. higher power generation, refining and petrochemical use, ”OPEC said.

If Q4 is colder than average, heating oil markets could be supported, especially in December 2021, but this upturn in demand could be offset by lower gasoline consumption, OPEC said.

“Going forward, despite expectations of a seasonal recovery in heating oil demand, as well as a possible switch from natural gas to liquid fuels, product markets are expected to experience some weakness during the winter ahead due to higher refinery throughput resulting in supply, ”the cartel noted.

The slight drop in global demand for oil in 2021, however, did not lead to any drop in demand for 2022, which OPEC still considers “supported by healthy economic dynamics in major consuming countries and better management of the pandemic. of COVID-19 “.

By Tsvetana Paraskova for OilUSD

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Felix J. Dixon