Opec Maintains 2022 Demand Outlook and Expects Mild Impact from Omicron Variant

Opec raised its global oil demand forecast for the first quarter of 2022 but left its full-year growth projection as it said the Omicron coronavirus variant would have a mild impact.

The oil exporters' group expects oil demand to average 99.13 million barrels per day (bpd) in the first quarter of 2022, up 1.11 million bpd from its forecast last month, it said in its monthly bulletin on Monday. World oil demand growth was kept unchanged at 4.2 million bpd and total global consumption at 100.6 million bpd.

The impact of the new Omicron variant is projected to “be mild and short-lived, as the world becomes better equipped to manage Covid-19 and its related challenges”, it said while predicting steady economic growth in both the advanced and emerging economies, despite global inflation concerns and supply chain bottlenecks.

The assessment from Opec comes as oil prices continued to trade higher, amid easing concerns over the Omicron variant hitting demand.

Demand for oil in Organisation for Economic Co-operation and Development countries is forecast to grow by 1.8 million bpd in 2022, while the non-OECD region is projected to increase by 2.3 million bpd.

Opec said,“supported by steady momentum in economic activities, particularly the biggest oil-consuming country, India and other Asian countries.”

The group kept world oil demand growth for 2021 unchanged from last month’s assessment of 5.7 million bpd.

Non-Opec supply growth in 2022 is expected to be 3 million bpd year-on-year on the back of an expected gradual increase in drilling and completion activities in the US, Opec said.

The US and Russia are forecast to contribute two thirds of total expected growth, followed by Brazil, Canada, Kazakhstan, Norway, and Guyana.