OPEC Expects Oil Demand to Gain Momentum

The Organisation of Petroleum Exporting Countries has speculated that the demand for crude oil will gain momentum in the second half of the year 2021, beginning from Thursday.

During the 31st Meeting of the Joint Ministerial Monitoring Committee, which was held via videoconference, OPEC Secretary-General, Mohammad Barkindo said: “Oil demand is forecast to grow by six million barrels per day to
around 96.6mb/d on average for the year.

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“Similar to the economy, growth in the second half of the year is expected to gain momentum, potentially surpassing 99mb/d in the fourth quarter.

Speaking from the angle of supply, Barkindo said the forecast by the organisation was that non-OPEC supply would grow by an estimated 0.8mb/d in 2021 for an average of 63.7mb/d.

He said, “We appear to be well on the road to recovery, with oil demand growth expected to accelerate in the second half of the year, however, let us be aware
that there are still uncertainties that could entail risks for market stability.

“Firstly, we are not completely out of the danger zone with the pandemic. We have seen in recent days an uptick in the spread of the so-called Delta
Variant, which is highly infectious and could prey upon those sectors of the population who have not yet been vaccinated.”

Barkindo noted that OPEC’s early numbers for 2022 indicated a significant imbalance between supply and demand from the second quarter of 2022 onwards.

The OPEC scribe therefore stated that in the second quarter of next year, the forecast was that supply would exceed demand by 5.4mb/d, adding that in the third quarter, it would be by 3.6mb/d and by 2.3mb/d in the fourth quarter of 2022.

“Given all of the painful lessons and sacrifices over the last 16 months, this is a scenario that none of us would like to see materialise,” Barkindo stated.

He advised members and non-members of OPEC to begin to plan for the next chapter in the indispensable format that was the Declaration of Corporation process in stabilising the business, beyond April 2022.