OGRepublic August Edition

OIL MARKET REPORT
World Oil Demand to Increase in 2022; US, China and
India Takes the Lead - OPEC
The global oil demand to increase in
2022 to reach a level similar to before
the pandemic, which the United
States, China and India will lead the growth
in terms of oil demand, according to
Organiszation of Petroleum Exporting
Countries (OPEC) oil market report.
The Secretary General of OPEC, Barkindo
Sanusi noted that the global oil demand next
year would increase up to 3.4% which is
approxiately 99.86 million barrels per day
(bpd), and would even increase to over 100
million bpd in the second half of 2022.
According to him, this increase would be
coming from the improved containment of
COVID-19, particularly in emerging and
developing countries, which are forecast to
increase oil demand to reach pre-pandemic
levels in 2022.
He added, "OPEC forecast oil demand in
China and India would exceed pre-pandemic
levels next year. The United States would
make the biggest contribution to 2022
demand growth, although U.S. oil use would
stay just below 2019 levels.
"World economic growth was expected to
slow to 4.1% next year from 5.5% in 2021, still
supported by government stimulus and with the
outlook “depending primarily on COVID-19-
related developments.
“Oil was trading below $74 a barrel after the OPEC
report was released. The price has climbed more
than 40% this year with the help of supply cuts by
OPEC and its allies, a group known as OPEC+."
Barkindo said that OPEC is optimistic that
demand will recover robustly from the pandemic,
allowing the group and its allies to further ease
record supply curbs made in 2020.
The report showed higher output from OPEC and
forecast more supplies from rivals in 2022,
including U.S. shale producers.
The report also forecast a wider supply deficit in
the fourth quarter of 2021, assuming OPEC+ does
not agree a further increase and based on Iran,
Libya and Venezuela, which are exempt from
OPEC+ cuts, sticking to their June production
levels.
The OPEC report forecast a 2.1 million bpd rise in
supply from OPEC’s rivals in 2022 as higher prices
spur investment. OPEC sees output of U.S. shale
oil, another term for shale, rising by 500,000 bpd
in 2022, after a contraction this year.
The extra barrels will limit growth in demand for
OPEC crude next year but OPEC still sees the
world needing 28.7 million bpd from its
members, up 1.1 million bpd from 2021 and, in
theory, allowing higher OPEC production.
OPEC has pumped 26.72 million barrels per day
(bpd), according to report. Output has risen every
month since June 2020 apart from February.
OPEC and allies, known as OPEC+, have been
unwinding record output cuts agreed in April
2020, as demand and the world economies
recovers.
“More forecasts are still predicting robust growth
in demand in the second half of the year,” said
Carsten Fritsch of Commerzbank. “It is easy to
believe that the oil market has learnt to live with
the virus.”
The oil market report reflects OPEC’s confidence
that demand will recover robustly from the
pandemic, allowing the group and its allies to
further ease record supply curbs made in 2020.
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