Amid the low level of oil supply, On Thursday the 11th November 2021, OPEC cut its demand forecast of oil outlook for the last quarter of 2021. This occurred as a result of rising prices of energy products which has in turn has hampered global economic recovery from the pandemic, However the cartel is optimistic production growth will rise significantly in 2022.
OPEC’s monthly reports reveals that forecasts for supply from U.S shale producers next year increased. Which is a prospective headwind to the efforts of the group and its allies to balance the market.
The expected demand for oil by OPEC is an estimated 99.49 million barrels per day in the fourth quarter of 2021, which declined by 330,0 fell by 160,000 to 5.65 million.
OPEC said “A slowdown in the pace of recovery in the fourth quarter of 2021 is now assumed due to elevated energy prices,”
Major stakeholders, which includes Government and companies amongst others, are closely monitoring the speed of oil demand as it recovers from the previous year.
The oil market changes will result in world consumption surpassing 100 million barrels per day in the third quarter of 2022 in the latest OPEC prediction, three months later than forecast last month.
Oil prices have surged this year to a three-year high above $86 a barrel as OPEC and its allies, known as OPEC+, gradually increase supply, OPEC also said it expects world oil demand growth of 4.15 million bpd next year.