OPEC will likely revise down its 2022 oil demand growth forecast on Monday, two OPEC+ sources said, as the spread of the Delta coronavirus variant puts the speed of a recovery in fuel use in doubt.
On Sept. 1, separate sources said the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, increased its 2022 oil demand forecast to 4.2 million barrels per day (bpd) from 3.28 million bpd previously.
The new figure was seen as optimistic by some in the group, likely prompting revisions, the two OPEC+ sources said. OPEC is scheduled to make its latest supply and demand forecasts public in a report on Monday.
“OPEC may review the figures again for the upcoming monthly report,” one of the sources said, declining to be named.
Governments, companies and traders are closely monitoring the speed that oil demand recovers after crashing in 2020. A slower return could weigh on prices and bolster the view that the impact of pandemic may affect consumption patterns for longer or permanently.
“Recent forecasts for oil demand are looking softer,” said Stephen Brennock of broker PVM in a report. “Growth for the near- to medium-term outlook is being progressively downgraded due to the resurgence of COVID-19, particularly in Asia.”
Brennock cited figures from the U.S. government’s forecaster, the Energy Information Administration, which said in its latest outlook on Sept. 8 oil demand would surpass 100 million bpd in the second quarter of 2022.
A month earlier, the EIA expected that milestone to be reached in the fourth quarter of 2021.
OPEC currently has the highest demand growth figures among the three main oil forecasting agencies – itself, the EIA and the International Energy Agency, an adviser to consuming nations which issues its latest monthly report on Tuesday.
In 2021, OPEC expects oil demand to rise by 5.95 million bpd, higher than the IEA figure of 5.3 million bpd and the EIA forecast of 5 million bpd.
For OPEC’s 2021 oil demand growth forecast to be met, world oil demand needs to average 99.82 million bpd in the fourth quarter – almost 1 million bpd higher than the IEA’s fourth-quarter projection.