The Organization of the Petroleum Exporting Countries (OPEC) on Thursday lowered its global crude oil demand projection for the fourth quarter of 2021 as high energy prices slowed down the pace of global demand to return to pre-pandemic levels. The group also raised its forecast on US shale oil production for 2022, a potential headwind to OPEC+ efforts to balance the market.
OPEC now estimates the world’s oil demand to average 99.49 million bpd in the fourth quarter of the year, 330,000 bpd lower than its previous forecast. Full-year demand growth projection was also trimmed by 160,000 bpd to 5.65 million bpd. The group also attributed the downward revision to slower-than-anticipated demand in China and India.
OPEC now expects global demand to exceed the pre-pandemic level of 100 million bpd in next year’s third quarter of 2022, three months later than its previous projection. The cartel maintained its projection that global crude consumption would increase by 4.15 million bpd in 2022. This will bring consumption to an average of 100.6 million bpd, above the pre-pandemic level in 2019.
Oil has climbed to a three-year high above $86 per barrel this year as OPEC+ only gradually raises supply amid robust demand and despite calls for more supplies from consumers. Crude prices were up slightly to just below $83 per barrel after OPEC released its latest outlook.
