OPEC stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron coronavirus variant and expected interest rate hikes, predicting the oil market would remain well supported through the year.
The upbeat view from the Organization of the Petroleum Exporting Countries comes as oil prices have reached the highest since 2014. Tight supply has given impetus to the rally, and OPEC’s report also showed the group undershot a pledged oil-output rise in December.
In a monthly report, OPEC said it expects world oil demand in 2022 to rise by 4.15 million barrels per day (bpd), unchanged from last month. Oil use will surpass the 100 million bpd mark in the third quarter, also in line with last month’s forecast.
“While the new Omicron variant may have an impact in the first half of 2022, which is dependent on any further lockdown measures and rising hospitalization levels impacting the workforce, projections for economic growth remain robust,” OPEC said in the report.
Interest rate rises, expected in 2022 to keep a lid on inflation and seen by some as risk to oil demand, are unlikely to dent the outlook, OPEC said. Expected U.S. rate hikes in the second quarter would coincide with the northern hemisphere driving season, which boosts fuel demand, it said.
“Monetary actions are not expected to hinder underlying global economic growth momentum, but rather serve to recalibrate otherwise overheating economies,” OPEC said.
“The oil market is expected to remain well-supported throughout 2022.”
This year’s demand rise will take oil use above pre-pandemic levels. On an annual basis according to OPEC, the world last used over 100 million bpd of oil in 2019.
