Brent, the worldwide benchmark for crude oil, increased modestly in price on Thursday, as the Organization of Petroleum Exporting Countries forecasted further growth in oil demand this year.
Brent rose $0.77, or 0.72 percent, to $107.57 per barrel at about 7.13 p.m. Nigerian time, according to industry data. The previous day, it had traded at approximately 106.8 per barrel.
OPEC noted that oil prices have been rising, particularly in March this year, in its message to the International Monetary and Financial Committee meeting of ministers and governors for April 2022, which was released on Thursday.
It claimed the ICE Brent benchmark averaged about $98/barrel in the first quarter of 2022, up about $18 from the fourth quarter of 2021, owing to growing geopolitical tensions in Eastern Europe and concerns that this could lead to substantial oil supply shortages and trade disruptions.
“World oil demand is anticipated to have recovered strongly in 2021, climbing by 5.7 million barrels per day,” the organization stated. Last year, global oil demand was expected to have reached 96.8 million barrels per day (mb/d).
“World oil demand growth is predicted to continue to improve in 2022, rising by roughly 3.7 million barrels per day to an average of 100.5 million barrels per day.”
Improvements in vaccination rates and a potential increase in public trust in managing COVID-19 are also expected to be more widespread in 2022, according to OPEC, bolstering oil demand, particularly for transportation fuels.
“In 2022, petrochemicals and transportation will be two industries that will require more oil.” Rising vehicle sales are expected to sustain gasoline demand in 2022, while increase in the petrochemical industry and stable petrochemical margins will support light distillates, according to the report.
According to the organisation, worldwide exploration and production capital expenditures for 2021 are expected to rise by 5.1 percent year on year to $413 billion, a far cry from the $885 billion spent in 2014.
On the back of sustained global economic and oil demand growth, global oil market fundamentals strengthened in the fourth quarter of 2021 and the first quarter of 2022, according to the report.
This was also due to continuous efforts by OPEC and non-OPEC producers participating in the Declaration of Cooperation to promote market stability, according to the organization.
“Despite the introduction of new COVID-19 strains, notably Omicron,” it noted, “oil market circumstances have improved since the last IMFC in October 2021.”
“However, more recent developments in Eastern Europe’s geopolitical developments, as well as the COVID-19 pandemic, notably in China, have prompted concerns about the global economic picture.”
Karl P. Awuni
