Lagos — The Organization of the Petroleum Exporting Countries, OPEC, says it sees a well-supported oil market in 2022 as oil prices on Wednesday, approached $90 per barrel.
In its closely watched Monthly Oil Market Report, MOMR, OPEC said the effect of the Omicron variant on global oil demand has been weaker than expected a month ago, and that the oil market is set to be well-supported throughout 2022 despite monetary tightening policies.
“In summary, monetary actions are not expected to hinder underlying global economic growth momentum, but rather serve to recalibrate otherwise overheating economies. With an ongoing robust oil demand forecast, and the continuing efforts of OPEC Member Countries and non-OPEC countries participating in the DoC, the oil market is expected to remain well-supported throughout 2022,” OPEC said.
The group left its demand growth estimates for this year unchanged at 4.2 million barrels per day, bpd, adding that average global consumption is set to reach 100.8 million bpd, exceeding pre-COVID levels.
Brent international climbed to $88.49/barrel around 9:20AM Nigerian time on Wednesday.
OPEC’s crude oil production rose by 170,000 bpd last month, according to its secondary sources, compared to a 253,000-bpd allowed monthly increase under the OPEC+ deal.
The Omicron impact was indeed mild and short-lived, OPEC said, reiterating its December view when it did not make any significant changes to demand forecasts either.
After Q4 2021 ended, OPEC said it has now adjusted its oil demand forecast for the last quarter of 2021 higher, “mainly to account for stronger-than-expected demand in Americas and the Asia Pacific and despite the emergence of the new COVID -19 variant (Omicron),” according to its January MOMR.
OPEC said it does not expect monetary actions from the Fed and other central banks—which have already signaled rate hikes are coming this year—to slow the current global economic momentum.
“The emergence of new variants after Omicron is a key uncertainty for 2022, as are supply chain bottlenecks that could hold back some of the momentum”.
Prices continue to be supported by yet an undersupplied market, as data showed that the group’s output for last month is still lower than what the cuts allow.
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