Opec keeps 2022 oil demand growth forecast unchanged

Opec has left its forecast for global oil demand growth unchanged for next year, but it has revised down its projection for this year on lower-than-expected consumption in January-September.

Opec's latest Monthly Oil Market Report (MOMR) pegs demand at 100.8mn b/d in 2022, up by 4.2mn b/d compared with this year. "The main oil demand assumption remains as highlighted last month, with healthy economic momentum in the main consuming countries and better Covid-19 management," Opec said. In terms of refined products, the 2022 forecast sees gasoline and diesel demand increasing the most, supported by continued recovery in mobility and rising industrial activity.

For this year, Opec has lowered its oil demand growth estimate by 140,000 b/d compared with last month's MOMR, despite the potential for gas-to-oil switching in the power sector. It now expects demand to increase by just over 5.8mn b/d to average 96.6mn b/d in 2021. Last month's MOMR pegged growth at just under 6mn b/d.

Transportation and industrial fuel demand was lower than expected in OECD regions in the first half of this year, while in non-OECD countries downward revisions were made on the back of lower demand in the third quarter. "The resurgence of Covid-19 cases reduced mobility in China during August, while the demand recovery in India was slower than initially anticipated," Opec said.

On the supply side, Opec has revised its 2022 forecast for non-Opec production growth up by 70,000 b/d to just over 3mn b/d, reflecting higher output estimates in the US and Kazakhstan. But it has cut its projection for non-Opec growth this year by around 260,000 b/d to 660,000 b/d, driven by hurricane-related shutdowns in the US and a force majeure at a Canadian oil sands site.

The updated supply and demand projections leave the forecast call on Opec members' crude at 27.8mn b/d in 2021 and 28.8mn b/d in 2022, each up by 100,000 b/d compared with last month's MOMR. Opec crude output was 27.3mn b/d last month, according to an average of secondary sources including Argus.

By Caroline Varin