If oil producers were hoping for a quiet 2022, they may be disappointed. There are two very different schools of thought emerging on what the oil market is going to look like this year. The one thing they agree on: It’s not going to be serene.
The bears see supply running ahead of demand, rising inventories and the OPEC+ producer group perhaps needing to consider another round of output cuts. The bulls focus on low stockpiles, dwindling spare production capacity amid a dearth of investment, and the prospect of triple-digit prices before 2022 is out. Unless demand growth slows dramatically, the latter argument looks more convincing.
The analysis presented to the producer group ahead of its meeting last week showed global oil stockpiles building throughout the coming year, wiping out virtually all of the draws seen in 2021.
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