OPEC forecasts global oil consumption to expand by 5.8 million barrels per day (bpd) this year from low 2020 levels, down from a forecast of 5.96 million bpd growth last month.
The cartel left its 2022 oil demand growth prediction steady at 4.2 million bpd, implying total world demand of 100.8 million bpd next year, according to the latest edition of its Monthly Oil Market Report (MOMR).
Last month, OPEC upped its 2022 oil demand prediction by 900,000 bpd, predicting that the surge in the Delta version will postpone the recovery of oil demand into the following year, owing to robust economic growth and a sharper rebound in gasoline consumption.
A seasonal boost in petrochemical and heating fuel demand, as well as a potential transition from natural gas to petroleum products due to high gas prices, will drive global oil demand in the fourth quarter.
Heating oil markets could be boosted if Q4 is colder than typical, according to the cartel, especially in December 2021, but this increase in demand could be countered by decreased gasoline usage.
Excerpts from the release:
Due to lower-than-expected actual data for the first three quarters of the year, OPEC reduced its 2021 projection downward in this month’s report and “despite healthy oil demand assumptions going into the final quarter of the year.”
In recent weeks, there has been growing interest in switching from gas to oil, and “should this trend continue, fuels such as fuel oil, diesel, and naphtha could see support, driven by higher demand from power generation, refining and petrochemical use.”
“Looking ahead, despite expectations of a seasonal pick-up in heating oil demand, as well as a potential switch from natural gas to liquid fuels, product markets are expected to see some weakness during the coming winter due to higher refinery throughput leading to ample supply.”
The slight downgrade to 2021 global oil demand, however, didn’t result in any downgrade for 2022 demand, which OPEC still sees as “supported by healthy economic momentum in the main consuming countries and better management of the COVID-19 pandemic.”
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