OPEC raises 2022 oil demand forecast, says omicron variant impact to be mild

OPEC on Monday raised its world oil demand forecast for the first quarter of 2022 but left its full-year growth prediction steady, saying the omicron coronavirus variant would have a mild impact as the world gets used to dealing with the pandemic.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report it expects oil demand to average 99.13 million barrels per day (bpd) in the first quarter of 2022, up 1.11 million bpd from its forecast last month.

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“Some of the recovery previously expected in the fourth quarter of 2021 has been shifted to the first quarter of 2022, followed by a more steady recovery throughout the second half of 2022,” OPEC said in the report.

“Moreover, the impact of the new omicron variant is projected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges.”

OPEC maintained its forecast that world oil demand will grow by 5.65 million bpd in 2021, after last year's historic decline at the start of the pandemic.

In 2022, OPEC expects further growth in demand of 4.15 million bpd, unchanged from last month, which will push world consumption above 2019 levels.

OPEC and its allies, known as OPEC+, are gradually unwinding record output cuts put in place last year. Earlier this month, OPEC+ agreed to boost monthly output by 400,000 bpd in January, despite concern about the new variant.

The report showed OPEC output in November rose by 290,000 bpd to 27.72 million bpd led by increases in top two producers Saudi Arabia and Iraq and a recovery from outages in Nigeria.

Read more: Oil prices dip below $75 as investors assess Omicron’s impact on global economy