Oil demand recovery to slacken amid high prices
According to the report provided by OPEC, by the end of the year, oil demand may show a smaller than expected rise. The forecast was trimmed by 160,000 barrels a day to 96.44 million barrels a day. OPEC cited low consumption in China and India in the third quarter of 2021.
The organization supposes that in the 4 quarter, oil demand could be curbed by rising energy prices. A slowdown in the pace of recovery could also be caused by lower demand for industrial and transportation fuel. That is why forecasts for oil demand in the fourth quarter were downwardly revised.
At the same time, in the non-OECD member countries, forecasts for oil demand were decreased by 0.12 million barrels a day. The fact is that a new coronavirus wave in China and tough quarantine measures in various countries reduced demand for transport and industrial fuel. In India, the situation is almost the same. There, demand for oil is rapidly falling. Analysts think that the trend will remain unchanged in the near future.
According to preliminary estimates, in 2022, oil demand will grow by 4.2 million barrels a day to 100.59 million barrels a day. This is 0.5 million barrels a day more than in 2019. Experts at OPEC+ foresee that demand for petrol and diesel fuel in 2022 will reach a record high in the OECD, US, and Europe. A drop in the number of intercontinental flights may lead to lower demand for kerosene. Notably, this year, consumption of kerosene has shown a jump.
OPEC+ estimates unveiled that next year, the OECD and China will take a leading position in terms of demand growth for industrial fuel. The preliminary data disclosed that in September 2021, commercial crude oil inventories climbed by 18.5 billion barrels. Meanwhile, inventories of commodities and oil products slid by 9.3 million barrels to 1.33 billion barrels.