OPEC yesterday raised its forecast for global oil demand in the first quarter of 2022 but kept its full-year growth forecast unchanged, saying that the Omicron mutant from the Corona virus will have a slight impact as the world coexists with the pandemic. The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that it expected oil demand to average 99.13 million barrels per day in the first quarter of 2022, 1.11 million more than its forecast last month.
“Some of the recovery that was expected for the fourth quarter of 2021 will occur instead in the first quarter of 2022, followed by a steady recovery during the second half of 2022,” OPEC said in the report.
“Moreover, the impact of the new mutant omicron is expected to be minor and short-lived as the world’s ability to deal with COVID-19 and the challenges associated with it increases,” she added.
OPEC maintained its forecast for global oil demand growth of 5.65 million barrels per day in 2021, after the historic decline last year at the beginning of the pandemic.
For 2022, OPEC expects further growth in demand at 4.15 million barrels per day, unchanged from its forecast last month, which will push global consumption above 2019 levels.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun to gradually abandon the record production cut that was implemented last year. This month, OPEC + agreed to increase monthly production by 400,000 barrels per day from January, despite concerns about the mutant Omicron.
The report showed that OPEC production rose in November by 290,000 barrels per day to 27.72 million barrels per day due to the increase in production of Saudi Arabia and Iraq, as well as the decline in supply disruptions from Nigeria.
Oil prices fell yesterday, due to new concerns related to the new mutated Omicron from the Corona virus, and doubts about the effectiveness of vaccines to protect against it.
Brent crude futures were down 78 cents, or 1 percent, at $74.37 a barrel by 1227 GMT.
US West Texas Intermediate crude fell 72 cents, or 1.0 percent, to $70.95 a barrel.
Both benchmarks recorded gains of eight percent last week, their first weekly gain in seven weeks, while the two crudes recovered more than half of the losses they suffered since the Omicron outbreak on November 25. The World Health Organization said that the omicron of the Corona virus, which has been detected in more than 60 countries, poses a “significant global risk” with some evidence that it is resistant to vaccines, but clinical data on its severity is still limited.
The University of Oxford said the vaccines showed lower levels of efficacy in protection than Omicron. The OPEC+ group, which includes OPEC and other producers, will meet on January 4 to determine production policy.
And the Iraqi oil minister said on Sunday that he expected OPEC, at its next meeting, to maintain its current policy of increasing production by 400,000 barrels per day each month.
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