Prospects for stronger oil demand in 2022 offering support to bullish traders, according to Rystad Energy

Global oil demand could average 100.03 million barrels per day (bpd) in 2022, up 4.24 million barrels per day from 2021; Rystad Energy said and noted that in a slow vaccination scenario, it expects demand for oil to reach only 99.07 million bpd.

“The outlook for stronger oil demand in 2022 still provides support for bullish traders and helps add barrels of dollars, but the market is better aware that Covid-19 still contains some uncertainty for the forecast ahead,” noted Nishant Bhushan, oil markets analyst at Rystad Energy.

He said: “While Tropical Storm Nicholas spared US production from further disruption, it is difficult to see how oil prices can rise further in the near term, and the market is now likely at the top of the curve before. that the return to production drives prices down – unless of course global supply suffers another surprise.

After Wednesday’s rally, said Bhushan, “the big question today was whether oil prices are able to hold their gains and stay at such high levels.”

The Energy Information Administration’s (EIA) ‘confirmation of a surprisingly large drawdown’ of crude inventories in the United States has helped keep the price increases, but now, as at the top of a scale, there may be. have turbulence with every move, and it will be difficult for prices to maintain that altitude for a long time – especially as US production will resume in the days and weeks to come.

Bhushan said that Ida’s affected oil production capacity continues to recover in the United States, and this should be reflected in prices in the coming days, but for now, the slow pace of this recovery coupled with the Stronger reduction in crude inventories appear to be supporting prices. .

On Wednesday, the EIA reported a large commercial crude oil inventory drawdown of 6.42 million barrels, significantly higher than last week’s draw of 1.53 million barrels of crude.

“The considerably high inventory draw in the United States is the result of the supply disruption caused by Hurricane Ida over the past three weeks. We might also see ripple effects over the coming week as the recovery in US Gulf of Mexico (GoM) supplies continues to be slow, ”Bhushan said.

Tropical Storm Nicholas, which was briefly promoted to hurricane status, did not have a major impact on upstream or downstream facilities and the uptrend was therefore capped slightly in the early hours of trading today. .

On the demand side, the IEA and OPEC have revised their forecasts upwards for 2022, with OPEC expecting demand to reach 100.8 million bpd in 2022, while the IEA l ‘estimated at around 99.8 million bpd, Bhushan noted.
Source: Gulf Times

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Felix J. Dixon

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