OPEC sees higher oil demand forecast for 2022 thanks to strong pandemic recovery

Crude oil storage tanks are seen from above at the Cushing Petroleum Center, appearing to run out of space to hold a historic supply glut that has driven prices up, in Cushing, Oklahoma March 24, 2016. Photo taken March 24, 2016. REUTERS/ Nick Oxford // File photo

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  • Keeps 2022 oil demand growth forecast steady
  • Maintains Q3 demand forecast at 100 million barrels per day
  • OPEC’s January production increases by 64,000 bpd, lagging promised increase

LONDON, Feb 10 (Reuters) – OPEC said on Thursday that global oil demand could rise even more strongly this year as the global economy shows a strong recovery from the pandemic, a development that would support prices already at their peak. highest level for seven years.

Tighter oil supplies also provided a boost to booming energy markets, and the report from the Organization of the Petroleum Exporting Countries also showed that the group had underestimated an increase in oil production promised in January as part of its pact with its allies.

In the report, OPEC said it expected global oil demand to rise by 4.15 million barrels per day (bpd) this year, unchanged from its forecast last month, after a sharp increase of 5.7 million bpd in 2021.

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“The upside potential of the forecast prevails, based on an observed strong economic recovery underway, with GDP already reaching pre-pandemic levels,” the OPEC report said in a commentary on the outlook for the request for 2022.

“While most global economies are expected to strengthen, the near-term outlook for global oil demand is certainly on the upside,” OPEC said in a separate commentary on 2022 demand.

Global consumption is expected to top the 100 million bpd mark in the third quarter, in line with last month’s forecast. On an annual basis according to OPEC, the world last used more than 100 million bpd of oil in 2019.

OPEC estimated early on that the effect of the Omicron variant coronavirus would be mild, and the report says it hasn’t had as negative an economic impact as previous waves of COVID-19.

Oil rose after the report was released, trading above $92 a barrel. On Monday, it hit $94, its highest level since October 2014.

OUTPUT UNDERRATES

The report also showed higher output from OPEC as the group and allied non-members, known as OPEC+, phase out record production cuts put in place in 2020.

OPEC+ aims to increase production by 400,000 bpd per month, with about 254,000 bpd due to 10 participating OPEC members, but production has increased by less than that as some producers struggle to pump more. Read more

The report showed that OPEC’s output in January rose just 64,000 bpd to 27.98 million bpd.

Seven of OPEC’s 13 members saw production declines, including Venezuela, Libya and Iraq.

The main exporter, Saudi Arabia, increased production by 54,000 bpd according to the report, but Saudi Arabia told OPEC it had made a larger increase of 123,000 bpd, which brought its production at 10.145 million bpd.

The forecast for non-OPEC aggregate supply growth in 2022 remained unchanged, as did that for U.S. tight oil production, another term for shale.

OPEC said it expects the world to need 28.9 million bpd from its members in 2022, up 100,000 bpd from last month and theoretically allowing for further increases in oil production. production.

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Editing by Kirsten Donovan and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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