Forecasts for world oil demand was kept unchanged at in OPEC’s Monthly Oil Market Report for December, showing a growth of 5.7 million barrels per day for 2021. The forecast for 2022 was also kept unchanged a 4.2 million barrels per day with some of the recovery expected for 4Q21 shifted to 1Q22.
“The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges,” notes the report. “This is in addition to a steady economic outlook in both the advanced and emerging economies.”
According to the report major uncertainties are the pace of vaccine roll-out and new variants of COVID-19 as well as supply chain bottlenecks. Sovereign debt levels, inflation and potential central bank responses also could effect demand.
According to the report output of crude in 2022 is expected to grow strongly in the US and Russia followed by Canada, Brazil, Kazakhstan, Norway and Guyana.
“In 2022, non-OPEC supply is projected to see robust growth of 3.0 mb/d, y-o-y, on the back of an expected gradual increase in drilling and completion activities in the US, leading to expected growth of 0.6 mb/d for US tight oil output,” state the report’s authors. “The US and Russia are forecast to contribute two thirds of total expected growth, followed by Brazil, Canada, Kazakhstan, Norway, and Guyana.”
Investment in the non-OPEC upstream sector in 2021 and 2022 dropped to $350 billion each, around 50% of its 2014 level, limiting growth potential.