OPEC May Cut 2022 Oil Demand Forecast

OPEC could revise down its forecasts for global oil demand in 2022, in view of the increased uncertainty with the Delta variant, two OPEC+ sources told Reuters on Friday.

OPEC is scheduled to release its closely-watched Monthly Oil Market Report (MOMR) on Monday, in which it could cut its oil demand estimates for next year, after keeping its demand outlook unchanged in the two previous reports, according to the sources.

“OPEC may review the figures again for the upcoming monthly report,” one of the OPEC+ sources told Reuters.

In its MOMR in August, OPEC said that global oil demand was expected to average 96.6 million barrels per day (bpd) this year and exceed 100 million bpd in the second half of 2022, keeping its estimates from July unchanged despite the COVID resurgence in major economies, including China and the United States.

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 in the August MOMR. 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, according to the organization.

Just ahead of the September 1 OPEC+ meeting, the broader alliance of OPEC and non-OPEC producers led by Russia was said to have estimated that the oil market would become increasingly tight this year, but return to a surplus next year.

Currently, OPEC has a more optimistic view on global oil demand than the International Energy Agency. The IEA warned in its monthly report in August that new mobility restrictions in Asia to fight the Delta variant were set to slow global oil demand growth in the second half of 2021, although it left its full-year demand growth estimates largely unchanged.

The oil market deficit of this year would turn into surplus, the IEA said.        

“But the scale could tilt back to surplus in 2022 if OPEC+ continues to undo its cuts and producers not taking part in the deal ramp up in response to higher prices,” the IEA said last month.

Its September report is due out on Tuesday, September 14.