OPEC Sees Oil Demand At 100 Million Bpd Next Year Despite COVID Surge

Global oil demand is expected to average 96.6 million barrels per day (bpd) this year and exceed 100 million bpd in the second half of 2022, OPEC said on Thursday, keeping its estimates from a month ago unchanged despite the COVID resurgence in major economies, including China and the United States.

In its Monthly Oil Market Report (MOMR), the organization raised its estimates for global economic growth for both 2021 and 2022, but left unchanged last month’s forecasts for global oil demand, expecting the economic recovery to take place mainly in non-oil intensive sectors. Global economic growth forecasts for this year and next were revised up by 0.1 percentage point, with OPEC now expecting growth for 2021 at 5.6 percent and growth in 2022 at 4.2 percent.  

“However, numerous challenges remain that could easily dampen this momentum. In particular, COVID-19-related developments will need close monitoring over the coming months, especially when considering the usual colder weather in the northern hemisphere towards the end of the year,” the cartel said.

Next year, global oil demand is set to average 99.9 million bpd, and to exceed 100 million bpd in the second half of 2022, OPEC said. This will be thanks to massive stimulus packages expected to raise economic growth and to expectations that the COVID-19 pandemic will be under control, supported by vaccination programs and improved treatment.

While leaving demand forecasts unchanged, OPEC significantly raised its estimates for non-OPEC supply growth, by 270,000 bpd for 2021 and by a massive 840,000 bpd for 2022. The upward revisions were made because of the OPEC+ deal which will see the alliance including non-OPEC Russia unwind their remaining cuts, by adding 400,000 bpd to the market each month. Apart from Russia and other non-OPEC members of the OPEC+ pact, the key drivers of higher non-OPEC supply will be the United States and Canada, OPEC said. The U.S. is now expected to raise its supply by 120,000 bpd annually in 2021 and by 800,000 bpd year-on-year in 2022. 

In terms of July 2021 production, OPEC’s crude oil production averaged 26.66 million bpd, up by 640,000 bpd, thanks to a large increase from Saudi Arabia which unwind the last part of its extra 1-million-bpd cut, OPEC’s report showed.