The Organization of the Petroleum Exporting Countries (Opec) has trimmed its world oil demand growth forecast for 2021 while maintaining its 2022 view, its monthly report showed on Wednesday, but it said surging natural gas prices could boost demand for oil products as end users switch.
Opec now expects oil demand to grow by 5.82 million barrels per day, down from 5.96 million bpd in its previous forecast, saying that the downward revision was mainly driven by data for the first three quarters of the year. It maintained a growth forecast of 4.2 million bpd for next year.
The group of oil-producing countries said, however, that natural gas prices at record highs could provide a potential headwind to oil demand growth as industrial users switch to oil products instead.
“Should this trend continue, fuels such as fuel oil, diesel, and naphtha could see support, driven by higher demand for power generation, refining and petrochemical use,” Opec said. Saudi Aramco CEO Amin Nasser last week put the demand boost from the gas-to-oil switch at about 500,000 bpd.
Opec+, an alliance between Opec and other producers led by Russia, agreed this month to stick with its plan for a 400,000 bpd production increase for November as it gradually unwinds output cuts it made to support previously low prices. In its report, OPEC raised its forecast for 2021 demand for Opec crude oil by 100,000 bpd to 27.8 million bpd and by another 100,000 bpd for 2022 to 28.8 million bpd.
Ban Arctic energy projects, says EU
The EU is seeking a ban on all new oil, gas and coal projects in the Arctic as part of its efforts to tackle climate change. It pledged to work with non-EU nations toward an obligation not to develop hydrocarbon reserves from the region. (Bloomberg)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.