OPEC cuts this year’s global oil demand forecast by 160k barrels daily

If the refineries are fed with crude that is divorced from OPEC-driven prices, then the pump price will be affordable to Nigerians

Global oil demand is estimated to increase by 5.8 million barrels per day (mb/d) in 2021, revised down from 5.96 mb/d in September assessment on account of lower than expected data from the first three months of the year, OPEC has said.

“This is in spite healthy oil demand assumptions going into the final quarter of the year, which will be supported by seasonal uptick in petrochemical and heating fuel demand and the potential switch from natural gas to petroleum products due to high gas prices,” OPEC said in its Oil Market Report for October.

The organisation said it both OECD and non-OECD figures are adjusted lower, with the downward revision in OECD regions focused in the first half of 2021, while the non-OECD revision is concentrated in the third quarter of 2021.

According to OPEC, the world is expected to consume 96.6 mb/d of petroleum products this year.

For 2022, it leaves world oil demand growth is unchanged at 4.2 mb/d. As a result, global demand next year is seen averaging 100.8 mb/d, it said.

“Demand is anticipated to be supported by healthy economic momentum in the main consuming countries and better management of the COVID-19 pandemic,” the report said.

The organisation also revised its supply forecast. It said non-OPEC liquids supply growth in 2021has been revised down by 0.3 mb/d from the previous month’s assessment to now stand at 0.7 mb/d.

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The revisions were driven mainly by a downward adjustment in the third quarter due to factors such as production outages in the US Gulf of Mexico caused by Hurricane Ida; maintenance in the Tengiz field in Kazakhstan; and a force majeure in Canada at the Suncor oil sands site.

“The impact of the Hurricane led to a downward revision in US liquids supply in 2021 from growth of 0.1 mb/d to a contraction of 0.1 mb/d.

OPEC said the main growth drivers for 2021 supply growth continue to be Canada, Russia, China, Norway, and Brazil.

However, it revised up the non-OPEC supply growth forecast for 2022 from 0.1 mb/d due to the base change to now stand at 3.0 mb/d.

Russia and the US are expected to be the main drivers, followed by Brazil, Norway, Canada, Kazakhstan, Guyana, and other countries in the DoC.

OPEC’s Natural Gas Liquids are forecast to grow by 0.1 mb/d in both 2021 and 2022 to average 5.2 mb/d and 5.3 mb/d, respectively.

OPEC said crude oil production in September increased by 0.49 mb/d month on month, to an average of 27.33 mb/d, citing available secondary sources.

Isaac Anyaogu

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States