Global oil demand has been estimated to reach 100.6mn barrels per day in 2022, around 0.5mn bpd above 2019 levels, Opec said in its November ‘Oil market report’.
For this year, Opec estimated the global oil demand at 96.4mn bpd.
Non- Opec liquids supply is expected to grow by 0.7mn bpd in 2021, unchanged from last month’s assessment, to average 63.6mn bpd. This is despite a marginal upward revision of 0.02mn bpd from the US, Canada, and Mexico, which were offset by a similar downward adjustment in the non-OECD.
The main drivers of 2021 supply growth continue to be Canada, Russia, China, Norway, Brazil and Guyana. The forecast for non- Opec liquids supply growth in 2022 is also unchanged at 3mn bpd to average 66.7mn bpd.
Russia and the US are expected to be the main drivers of next year’s growth, contributing increments of 1mn bpd and 0.9mn bpd, respectively, followed by Brazil, Canada, Kazakhstan, Norway, Guyana and other countries in the DoC.
Opec NGLs are forecast to grow by 0.1mn bpd both in 2021 and 2022 to average 5.2mn bpd and 5.3mn bpd respectively.
In October, Opec crude oil production increased by 0.22mn bpd month-on-month (m-o-m), to average 27.45mn bpd, according to available secondary sources.
According to the report, crude oil spot prices surged by more than 12% in October, on the back of soaring energy prices in Europe and Asia.
Strong oil market fundamentals, compounded by expectations of higher oil demand in the winter months from “gas to oil switching”, have supported both spot and futures prices.
The OPEC Reference Basket (ORB) increased $8.23 or 11.1%, m-o-m, in October to average $82.11/b.
Year-to-date (YTD), the ORB averaged $68.33/b, for a gain of $27.77, or 68.4%, compared to the same period last year. In the futures market, the ICE Brent front-month contract rose $8.87 or 11.8%, m-o-m, to average $83.75/b in October, while NYMEX WTI increased $9.68 or 13.5%, m-o-m, to average $81.22/b. Consequently, Opec noted the Brent/WTI spread narrowed by 81¢ to stand at $2.53/b in October. The market structure of all three major oil benchmarks – Brent, WTI and Dubai – strengthened, moving deeper into backwardation on further declines in OECD commercial oil stocks in September and the prospect of stronger near-term market fundamentals.
“Hedge funds and other money managers boosted bullish positions related to NYMEX WTI in October as data showed ongoing drawdowns in inventories at the Cushing, Oklahoma, trading hub. However, speculators cut bullish positions related to ICE Brent,” Opec said.
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