Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

OPEC upbeat on 2022 oil demand, says Omicron impact to be mild

CommoditiesDec 13, 2021 11:32AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The OPEC logo pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria, September 28, 2016. REUTERS/Ramzi Boudina

By Alex Lawler

LONDON (Reuters) - OPEC on Monday raised its world oil demand forecast for the first quarter of 2022 and stuck to its timeline for a return to pre-pandemic levels of oil use, saying the Omicron coronavirus variant would have a mild and brief impact.

The upbeat view from the Organization of the Petroleum Exporting Countries comes as oil prices have recovered some of the slide seen when the variant emerged last month. Still, the World Health Organization says Omicron poses a "very high" global risk.

In a monthly report, OPEC said it expects world oil demand to average 99.13 million barrels per day (bpd) in the first quarter of 2022, up 1.11 million bpd from its forecast last month.

"Some of the recovery previously expected in the fourth quarter of 2021 has been shifted to the first quarter of 2022, followed by a more steady recovery throughout the second half of 2022," OPEC said in the report.

"Moreover, the impact of the new Omicron variant is projected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges."

Oil dropped 10% on Nov. 26 when reports of the new variant emerged as traders feared a renewed hit to demand. But OPEC and its allies decided on Dec. 2 to stick to a planned production increase for January, a gamble that looks to have paid off as prices stabilise.

In the report, OPEC maintained its forecast that world oil demand will grow by 4.15 million bpd in 2022. This year's growth forecast was also kept unchanged.

World consumption is expected to surpass the 100 million bpd mark in the third quarter of 2022, in line with last month's forecast. On an annual basis according to OPEC, the world last used over 100 million bpd of oil in 2019.

Oil pared an earlier decline after the report was released and was trading close to $75 a barrel, up from a dip below $66 on Dec. 2.

HIGHER OPEC SUPPLY

The report also showed higher output from OPEC as the group and allies, known as OPEC+, gradually unwind record output cuts put in place last year.

At its Dec. 2 meeting, OPEC+ agreed to boost monthly output by 400,000 bpd in January, despite fears about the new variant.

The report showed OPEC output in November rose by 290,000 bpd to 27.72 million bpd led by increases in top two producers Saudi Arabia and Iraq and a recovery from outages in Nigeria.

Traders are watching for signs of a big rebound in U.S. shale supply as higher prices prompt more investment, which could prove a headwind to OPEC+ efforts to support the market.

But this month, OPEC left its prediction for growth in U.S. tight oil, another term for shale, largely steady at 600,000 bpd in 20222. The growth forecast for overall non-OPEC supply in 2022 was left unchanged.

For now, OPEC has room to raise output further from November's rate, the report indicates. OPEC said it expects the world to need 28.8 million bpd from its members in 2022, up 200,000 bpd from last month.

OPEC upbeat on 2022 oil demand, says Omicron impact to be mild
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
chukwuma ememe
chukwuma ememe Dec 13, 2021 8:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When everyone is talking about reducing use of fossils, OPEC is waxing in relevance,will the World ever so green or are We fooling ourselves?
michael engel
michael engel Dec 13, 2021 8:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
if crude oil rise to a lower high, under 85, it will form a right shoulder. Target mid 40's, or below.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Dec 13, 2021 8:25AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Oh yeah? But a nice Fed slamming will not be so mild
Stephen Fa
Stephen Fa Dec 13, 2021 7:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Very bullish on oil here. $USO $UCO
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email