Economy
OPEC Cuts 2021 World Oil Demand Forecast Due To High Prices
On Thursday, the Organization of Petroleum Exporting Countries (OPEC) announced that they cut its world oil demand forecast for the last quarter of 2021.
The reason? High energy prices are limiting the efforts of countries to recover from the COVID pandemic. This means that the timeline for oil returning to pre-pandemic levels will take longer.
RELATED: OPEC+ Won’t Raise Oil Production Output Despite US Pressure
OPEC Cut 2021 World Oil Demand Forecast, Raises US Shale Supply Estimates
In its latest monthly report, OPEC also raised the supply forecast of oil from US shale producers in 2022. This is a potential headwind to OPEC and OPEC+ member allies to balance the global oil market.
The organization said its new oil demand forecast will average 99.49 million barrels per day during the fourth quarter of 2021.
This is down 330,000 barrels per day (BPD) compared to last month’s forecast. OPEC cut its 2021 demand growth forecast by 160,000 BPD to 5.65 million BPD.
The year's demand growth forecast was trimmed by 160,000 BPD to 5.65 million BPD. “A slowdown in the pace of recovery in the fourth quarter of 2021 is now assumed due to elevated energy prices,” OPEC reported.
It cited slower-than-expected demand in China and India for the world oil demand forecast revision. With lower demand, OPEC said it expects the world to need 28.7 million BPD from its members in 2022. This rate is down to 100,000 BPD from last month. However, it still allows for higher OPEC production.
Oil Prices At Three Year Highs
Despite the increased demand from reopening economies, OPEC+ decided to gradually increase the supply of oil. As a result, prices of oil rose to three-year highs exceeding $86 a barrel.
Fuel prices in many countries are now displaying their highest rates in years. In addition, natural gas, coal, and power prices also soared to record highs.
Meanwhile, governments and businesses continue to monitor the recovery rate of their economies. A slower pace could ease the current upward pressure on prices.
It can also help bolster the idea that the pandemic caused the demand for oil to lower permanently.
100 BPD Global Demand to Happen by 3Q 2022, Not 2Q
As a result of their oil demand forecast adjustments, OPEC now believes that the 100 million BPD demand will happen a quarter later than expected.
Instead of the second quarter of 2022, OPEC now sees the third quarter as the probable target date. The last time the world needed 100 million BPD was in 2019.
OPEC also stuck to its forecast that demand will rise by 4.15 BPD by next year. If this comes true, the average consumption of 100.6 million BPD will happen as well, exceeding 2019 rates.
Despite the report, oil prices hardly changed yesterday. Prices remained just below $83 a barrel, which is up from an earlier decline.
Meanwhile, OPEC+ is gradually returning back the production cuts it made last year. In July, it agreed to raise output by 400,000 BPD a month beginning August.
As a result, oil output rose in October by 220,000 BPD to 27.45 million BPD. Top oil producer Saudi Arabia provided half of the 220,000 BPD rise.
However, four of the 13 OPEC members could not deliver their commitment to raise output due to lack of capacity.
OPEC Sees US Shale Rising By 610,000 in 2022
OPEC also sees the potential increase of US oil production. The group forecasted that US tight oil (shale) will rise by 610,000 BPD in 2022.
This is 200,000 BPD more from last month’s forecast. Higher oil prices are prompting more investments in the industry.
Watch the WION news video reporting that petroleum exporting countries' organization trims world oil demand growth forecast:
Loading ...What do you think of the ongoing OPEC decision to cut its world oil demand forecast? Do you think this will lead to a longer period of high oil and fuel prices?
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10 Comments
We need to open our energy supply Biden is a big duck and is hurting every American in the country!
I believe it’s the PRS STUNT AGAIN.(PROBLEM-REACTION-SOLUTION) They create the problem and they depend on the reaction, in which they already have the “solution”. And the solution is not for the better as far as we the people are concerned. Can you say, TOTALITARIAN TIP-TOE!!!!
In sensitive areas for line breaks you can put a sleeve twice the diameter of existing pipe and pumpkins on each end Great for under water lines. This technique will contain a leak with sensors notification of ruptured line. And give long enough warning to shut down by using mercury float switches to notify the lproper offer. But these would have to be manned 24/7. Then you coul pump oil out of containment outer sleeve. And. Keep our water clean. Problem solved.
The biden administration and China planned all this release the Covid-19 to stop president trump biden becomes president stops the keystone pipeline and fracking think about what has happened since biden has been in office everything is more expensive borders are open biden is going to give illegals money while our own people are homeless die from drugs the democratic are destroying AMERICA and some republicans are helping them I thought I would mention Afghanistan where we lost thirteen soldiers left AMERICANS now it’s worse than twenty years ago thanks to biden again
Gas prices last November 1.69 a gal under trump in northern minnesota 0ne year later 3.49 under biden but beg OPEC to supply more WTF
I totally agree with you. $1.69 a year ago, $3.40 now. The news is saying how gas has gone up 42% The Nuns that taught me would have had a stroke with their math.
Build Back OPEC Better!
Biden isn’t running this country. He has no idea what’s going on…everything that’s being done is the direct opposite of what he wanted when he was in the Senate His administration are absolute fools to think the American people will put up with their anti-American, Marxist ideas. They’ll never be able to take control and change this country into what they want. We the people won’t let them unless the stupid people vote for the DemonRats in 2022. Pelosi is pushing to pass these other bills H.R.1 and the $3.5Trillion bill before the 2022 election. McConnell seems to think he can block them. I hope so. I’m sad to see how many anti-Americans are in the government,especiallly the Squad. They need to go and two of them need to be stripped of their citizenship and deported back to their original country.Otheres like Yellen, AOC, Pressley, Booty, ack…all of them need to be stripped of their positions because (1) they have no idea what they’re doing; and (2) they are destroying this country.
The demodemons are just trying to crush America its all about the one world order. Power. I can’t begin to say the horribal things our politicions have allowed to happen in this country. It’s the greed in them. But they still have to face GOD in the end. Praise GOD.
biden needs to go along with the rest of the dumbacrats and that thing they call speaker of the house to
The Demoncrats and Bad news Biden have control over our oil production! It has nothing to do with OPEC, when we were producing OPEC was ok with it and now that these demons are in control Biden wants us to think that its OPEC fault when its all on him!