OPEC expects Delta variant to retard growth in oil demand

A 3D printed oil pump cylinder can be seen in front of the displayed stock chart and the Opec logo in this illustrative image, April 14, 2020. REUTERS / Dado Ruvic / Illustration / File Photo

  • Maintains demand growth forecast for 2021 at 5.96 mln bpd
  • Demand exceeds pre-pandemic levels in 2022
  • OPEC August production increases 150,000 bpd as OPEC + rolls back cuts

LONDON, Sept. 13 (Reuters) – OPEC on Monday lowered its forecast for global oil demand for the last quarter of 2021 due to the variant of the Delta coronavirus, saying a further recovery would be delayed until next year , when consumption exceeds pre-pandemic rates.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that it expects demand for oil to average 99.70 million barrels per day (bpd) in the fourth quarter of 2021, in 110,000 bpd down from last month forecast.

“The increased risk of COVID-19 cases primarily fueled by the Delta variant darkens the outlook for oil demand for the last quarter of the year,” OPEC said in the report.

“As a result, demand for oil in the second half of 2021 has been adjusted slightly downward, partially delaying the recovery in oil demand in the first half of 2022.”

Governments, businesses and traders are closely monitoring how quickly oil demand is recovering from last year’s crash. A faster comeback, as expected by OPEC, could push prices up and challenge the idea that the impact of the pandemic could curb consumption for longer or for good.

Oil was trading above $ 73 a barrel after the report was released. Prices have risen by more than 40% this year, boosted by hopes of an economic recovery and OPEC + supply cuts, although concerns over the Delta variant weighed in.

Despite the fourth quarter downgrade, OPEC said global oil demand for all of 2021 would increase by 5.96 million bpd or 6.6%, virtually unchanged from last month.

The growth forecast for 2022 has been adjusted to 4.15 million b / d, down from 3.28 million b / d in last month’s report and an estimate of 4.2 million b / d given by sources. OPEC at the group’s last meeting on September 1. read more

“The pace of the recovery in oil demand is now assumed to be stronger and to take place mainly in 2022,” OPEC said.

“As vaccination rates increase, the COVID-19 pandemic should be better managed and economic activities and mobility will firmly return to pre-COVID-19 levels. “

HIGHEST DEMAND VIEW

With the latest changes, OPEC still has the highest demand growth figures among the three major oil forecasting agencies – itself, the US government and the International Energy Agency, a country adviser. consumers who published their last monthly report on Tuesday.

OPEC and its allies, known as OPEC +, are gradually reversing the record cuts in oil production put in place last year due to the pandemic. In July, they agreed to gradually increase production by 400,000 bpd per month from August and confirmed the plan at their last meeting on September 1.

The report showed that OPEC’s production rose 150,000 bpd in August to 26.75 million bpd, led by Iraq and Saudi Arabia. An involuntary cut in Nigeria reduced the scale of the increase in supply.

Editing by Emelia Sithole-Matarise

Our standards: Thomson Reuters Trust Principles.


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Felix J. Dixon

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