OPEC sees global oil demand reach pre-pandemic level in 2022

The logo of the Organization of the Petroleum Exporting Countries (OPEC) can be found in front of its headquarters ahead of the OPEC and NON-OPEC meeting in Austria on December 6, 2019. REUTERS / Leonhard Foeger / File Photo

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  • Oil demand seen at 99.86 mbpd in 2022, similar to 2019
  • Oil demand growth forecast for 2021 maintained at 5.95 mln barrels per day
  • OPEC production in June increases by 590,000 bpd as cuts relax
  • U.S. shale production picks up again in 2022

LONDON, July 15 (Reuters) – OPEC predicted on Thursday that global oil demand would rise in 2022 to a level similar to pre-pandemic, driven by growth in the United States, China and India .

The Organization of the Petroleum Exporting Countries said in its monthly report that demand will increase by 3.4% next year to 99.86 million barrels per day (bpd), and will average over 100 million barrels per day (bpd). bpj in the second half of 2022.

“Strong expectations exist for global economic growth in 2022,” OPEC said. “These include better containment of COVID-19, especially in emerging and developing countries, which are expected to drive demand for oil to reach pre-pandemic levels in 2022.”

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The report reflects OPEC’s confidence that demand will recover vigorously from the pandemic, allowing the group and its allies to further ease record-breaking supply restrictions in 2020. Some analysts have said global demand oil may have peaked in 2019. read more

In the report, OPEC also maintained its forecast that demand would increase by 5.95 million bpd or 6.6% in 2021.

OPEC predicts that demand for oil in China and India will exceed pre-pandemic levels next year. He said the United States would make the largest contribution to demand growth in 2022, although U.S. oil use would remain just below 2019 levels.

Global economic growth is expected to slow to 4.1% next year from 5.5% in 2021, still supported by government stimulus measures and with the outlook “depending primarily on developments related to COVID-19,” said OPEC.

Oil was trading below $ 74 a barrel after the release of the OPEC report. The price has climbed more than 40% this year thanks to supply cuts from OPEC and its allies, a group known as OPEC +.

MORE SUPPLY TO COME

The report showed higher OPEC production and forecast more supplies from rivals in 2022, including U.S. shale producers.

OPEC + agreed in April to gradually ease production cuts from May to July. Thursday’s report showed OPEC production in June increased 590,000 bpd to 26.03 million bpd.

OPEC + is yet to decide on plans for the remainder of 2021 after a dispute between Saudi Arabia and the United Arab Emirates disrupted talks. Reuters reported on Wednesday that the two had reached a compromise. Read more

The report implies a larger supply deficit in the fourth quarter of 2021, assuming OPEC + does not accept a further increase and based on Iran, Libya and Venezuela, which are exempt from cuts in the ‘OPEC +, sticking to their June production levels.

The report predicts a 2.1 million barrels per day increase in supply from OPEC’s competitors in 2022, as higher prices spur investment. OPEC sees oil production from US shale, another term for shale, increase by 500,000 bpd in 2022, following a contraction this year.

The extra barrels will limit the growth in OPEC crude demand next year, but OPEC still considers the world needs 28.7 million bpd from its members, up from 1.1 million bpd compared to 2021 and, in theory, allowing for higher OPEC production.

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Editing by Edmund Blair

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Felix J. Dixon