The Organization of Petroleum Exporting Countries (OPEC) said that its forecast for the growth of global demand for oil will decline in the last quarter of this year.
OPEC attributed the reason for the reduction of expectations to “the growth in demand for oil is due to the rise in energy prices.”
However, OPEC maintained its expectations of strong demand growth above pre-pandemic levels in 2022.
In its monthly report, OPEC said it expected oil demand to average 99.49 million barrels per day in the fourth quarter of 2021, a decrease of 330,000 barrels per day from last month’s forecast.
OPEC stuck to its forecast for global demand growth of 4.15 million barrels per day next year. This will reach an average consumption of 100.6 million barrels per day, which is higher than 2019 levels.
There is an assumption that there will be a slowdown in the pace of recovery in the fourth quarter of 2021 due to the rise in energy prices, OPEC said in the report.
OPEC also based its assumption on a slower than expected in China and India.
Oil prices has jumped to a 3-year high, exceeding $86 a barrel this year, as OPEC+ only gradually raises the volume of supplies while increasing demand, which pushed prices to their highest levels in years in some markets.
Governments, companies, and traders are closely watching how quickly oil demand recovers.
This happening at a slower pace would ease upward pressure on prices and reinforce the view that the impact of the pandemic will permanently dampen demand.
OPEC expects global consumption to exceed 100 million barrels per day in the third quarter of 2022, three months after last month’s forecast.
The last time the world consumed more than 100 million barrels per day was in 2019 on an annual basis, according to OPEC.
There was little change in the price of oil at less than $83 a barrel after the release of the report, up from a previous decline.
Iraqi Oil Minister Ihsan Abdul-Jabbar said, on Thursday, that the OPEC+ group of oil-exporting countries is expected to review production policy in the first quarter of 2022.
He also expected the group to keep the current policy unchanged at its next meeting in December.
The US inflation has fueled investors’ fears that the increase in inflation will prompt the US government to release more strategic crude reserves to bring prices down.