OPEC+ ups its 2022 global oil demand forecast

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The expanded organisation of oil exporting countries OPEC+ announced it revised upwards its forecast for the global demand and consumption in 2022. The projected higher demand is coupled with falling inventories and rising prices, Reuters elaborated. OPEC+ is under intense pressure by US to increase its oil output.

OPEC+ earmarked that group's experts revised the 2022 oil demand growth forecast to 4.2 million barrels per day (bpd), up from the previous expectations of 3.28 million bpd. OPEC+ expects global oil demand to grow by 5.95 million bpd in 2021 after a record drop of about 9 million bpd in 2020 because of the Covid-19 pandemic. Still it is unlikely to have a drastic change in production police despite the growing pressure from US.

However, the higher demand forecast strengthens the case for a speedier output increases by OPEC+ as benchmark Brent crude traded above $72 per barrel, close to multi-year highs. The demand forecast revision came during the OPEC+ joint technical committee (JTC), which presented an updated report on the state of the oil market in 2021-2022. OPEC+ sources said the report, which has not been made public, forecast a 0.9 million bpd deficit this year as global demand recovers. The report had initially forecast a surplus of 2.5 million bpd in 2022 but this was later revised to a smaller surplus of 1.6 million bpd due to stronger demand. As a result, commercial oil inventories in the OECD, a group of mostly developed countries, would remain below their 2015-2019 average until May 2022.

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