OPEC sticks to oil demand despite virus, sees more US shale coming

  • Maintains demand growth forecast for 2021 at 5.95 mln bpd
  • OPEC July production increases 640,000 bpd as Saudi voluntary cut ends
  • Raises non-OPEC supply forecasts and sees greater shale growth in 2022
  • Reduces expected OPEC crude demand next year by 1.1 mbpd

LONDON, Aug.12 (Reuters) – OPEC on Thursday maintained its prediction of a strong recovery in global oil demand in 2021 and further growth next year, despite concerns over the spread of the oil variant. Delta coronavirus which weighed on prices.

The Organization of Petroleum Exporting Countries in a monthly report also raised its supply forecasts from its competitors, including American shale producers, next year, a potential headwind for the efforts of the group and its allies. to balance the market.

“The world economy continues to recover,” OPEC said in the report. “However, many challenges remain that could easily dampen this momentum. In particular, developments related to COVID-19 will require close monitoring.”

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OPEC’s view that demand will ignore the latest pandemic setback contrasts with that of the International Energy Agency, which slashed its outlook on Thursday. Read more The US government forecaster also maintained his growth forecast for 2021, but lowered them for 2022.

Oil demand will increase by 5.95 million barrels per day (bpd) this year, or 6.6%, unchanged from last month’s forecast, OPEC said in the report. In 2022, fuel consumption will increase by 3.28 million barrels per day, OPEC said, also unchanged.

Oil was trading above $ 71 a barrel after the report was released. Prices have reached pre-pandemic highs above $ 77 this year, boosted by hopes of an economic recovery and OPEC + supply cuts, although concerns over the Delta variant weighed in.

OPEC has raised its forecast for global economic growth in 2021 to 5.6% from 5.5% on the assumption that the impact of the pandemic will be contained, although it has warned of “significant uncertainties”. The outlook for 2022 has been raised by the same increment to 4.2%.

“The trajectory of the COVID-19 pandemic will be the primary factor impacting the pace of recovery in the short term, with the potential emergence of new COVID-19 variants and / or mutations posing particular risk,” said declared OPEC.


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

OPEC and its allies, known as OPEC +, are gradually reversing record cuts in oil production put in place last year when the pandemic hit demand. In July, they agreed to gradually increase production by 400,000 bpd per month from August.

The report showed that OPEC’s production rose 640,000 b / d in July to 26.66 million b / d, as Saudi Arabia rolled back the remainder of a voluntary cut in offer she made to support the market.

The report predicts a 2.9 million bpd increase in supply from OPEC competitors in 2022, 840,000 bpd more than last month, in part due to OPEC + ‘s decision to pump more and while higher prices stimulate investment.

OPEC sees U.S. tight reservoir oil production, another term for shale, increase by 560,000 bpd in 2022, up 60,000 bpd from last month’s forecast, following a contraction this year.

“In the United States, operators have remained very disciplined in 2020-2021,” OPEC said. “Nonetheless, the number of rigs continues to increase, more wells are fractured and more fracturing teams are deployed as companies once again have free cash flow.”

The extra barrels will limit the growth in demand for OPEC crude over the next year. OPEC estimates the world needs 27.6 million bpd of its members, down 1.1 million bpd from last month, but still in theory, allowing for higher OPEC production.

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Editing by Jason Neely and David Evans

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Felix J. Dixon