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Stronger economic growth and the easing of COVID restrictions make the near-term prospects for global oil demand bright, with an upside potential, OPEC said on Thursday, keeping its forecast that consumption will exceed pre-pandemic levels in 2022.
In its closely-watched Monthly Oil Market Report (MOMR), the organization revised up slightly, by 10,000 bpd, its annual oil demand estimate for 2022 to 100.8 million bpd, up from 100.79 million bpd in last month’s report.
Estimates for the third and fourth quarter of 2022 were revised up by 30,000 bpd and 20,000 bpd, respectively. OPEC sees global oil demand averaging 101.32 million bpd in Q3 2022, and 102.92 million bpd in Q4.
Overall annual demand growth this year was left unchanged at 4.2 million bpd. This year’s expected global demand average of 100.8 million bpd will exceed the 2019 level, OPEC said.
In last month’s report, OPEC also left its demand growth estimate for 2022 unchanged, and said that the effect of Omicron on oil demand had been weaker than expected a month earlier, and the oil market was set to be well-supported throughout 2022 despite monetary tightening policies.
In this month’s report, OPEC appears even more optimistic, although it left the demand growth forecast unchanged.
“As most world economies are expected to grow stronger, the near-term prospects for world oil demand are certainly on the bright side,” the cartel said in the report.
The COVID containment, supply chain disruptions, inflation, and labor shortages that could slow economic growth will continue to be the main challenges to the global economy this year, OPEC said.
“Nevertheless, upside potential to the forecast prevails, based on an ongoing observed strong economic recovery with the GDP already reaching pre-pandemic levels, supported by fiscal stimulus, and global trade levels reaching an all-time high in volume terms. Moreover, mobility is expected to gain further momentum, particularly with regard to the travel and tourism sector,” the organization added.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com