Opec sees stronger global demand for its crude this year and next

Opec has predicted stronger demand for its crude on a combination of rising global fuel consumption and output disruptions elsewhere

Opec predicted stronger demand for its crude on a combination of rising global fuel consumption and output disruptions elsewhere. The latest data from the group indicate that the world will continue to face an oil supply deficit in the coming months even as its members revive idle production. Despite the threat of the delta variant of Covid-19, fuel consumption is recovering while crude production from the North Sea to the US and Mexico comes in lower than anticipated. “The global economic recovery, in combination with a considerable rebound in mobility, significantly lifted oil demand growth in the first half,” according to a monthly report from the Organization of Petroleum Exporting Countries’ Vienna-based secretariat published on Monday. “While this dynamic is forecast to soften towards the end of 2021,” the overall trend is positive. The world’s appetite for Opec crude was revised up by 260,000 barrels a day for this year, compared with last month’s estimate, largely due to supply disruptions outside the group. North American output was curbed by Hurricane Ida and a fire at an offshore platform in Mexico, according to the report. North Sea production has also been lower than expected this quarter. The demand for Opec crude was revised higher by 1.12mn barrels a day for 2022. Global consumption is expected to increase by 4.2mn barrels a day next year to 100.8mn barrels a day, 980,000 barrels a day higher than last month’s estimate and exceeding pre-pandemic levels. Opec’s production rose by 151,000 barrels a day to 26.76mn barrels a day in August – still significantly below the average global demand for Opec crude in the third quarter. That leaves plenty of space for the organisation and its allies to gradually revive 400,000 barrels a day of idle production each month, in line with the July Opec+ agreement. Still, the data showed that it isn’t just non-Opec nations experiencing production problems. Despite being permitted to increase production in August, several African members showed little growth, or in the case of Nigeria saw a 114,000 barrel-a-day drop in production.