OPEC Sees Gradual Recovery in Demand for Its Oil Into Next Year - Bloomberg

OPEC Sees Gradual Recovery in Demand for Its Oil Into Next Year - Bloomberg

OPEC forecast a gradual recovery in demand for its crude this year and next, as the group closes in on a deal to revive the production still shuttered since the pandemic.

The need for supplies from the Organization of Petroleum Exporting Countries will continue to climb, remaining well above the group’s current output and exceeding pre-virus levels by the second half of 2022. But it will go through a lull in the first quarter that could see the global market return to surplus, the group indicated.

“Looking ahead to 2022, risks and uncertainties loom large and require careful monitoring to ensure the recovery from the Covid-19 pandemic,” OPEC said in its monthly report, which contained the first detailed estimates for next year.

The mixed outlook fits with plans by OPEC and its allies -- yet to be ratified -- to gently restore the vast amounts of production they still have offline in monthly tranches of 400,000 barrels a day. Before that road map can be approved, the group must first resolve a spat between the United Arab Emirates and Saudi Arabia.

The two countries have made progress in resolving a dispute over what the UAE says is an unfairly low output limit. If they can overcome the bitter impasse, the coalition can proceed with restarting the idled barrels.