FRI 12 NOV, 2021-theGBJournal- Organisation of the Petroleum Exporting Countries (OPEC) in its latest oil market report revised world oil demand growth in 2021 by around 0.16 mb/d, compared to last month’s assessment, to stand at 5.7 mb/d.
OPEC said revisions were mainly to account for slower than anticipated demand from China and India in 3Q21.
Global oil demand is now estimated to reach 96.4 mb/d in 2021. For 2022, growth in global oil demand remains unchanged compared to the previous month’s assessment, to stand at 4.2 mb/d.
World total demand in 2022 is now estimated to reach 100.6 mb/d, around 0.5 mb/d above 2019 levels. Marginal upward revisions in OECD Europe, due better economic views in some European countries, were offset by softer growth in industrial fuel demand, in OECD America and Latin America.
Meanwhile, major spot crude oil benchmarks surged by more than 12% in October. North Sea Brent averaged above $83/b, while Dubai and WTI first forward month averaged above $81/b.
Rising oil futures prices and prospects of higher oil demand in the winter months due to gas-to-oil switching, as well as stronger refining margins and the continued decline in oil stocks in major consuming regions, greatly supported spot crude oil prices over the month. Oil prices continued to increase over October given ongoing positive market sentiment on the back of improving market fundamentals and signs of a resumption in crude oil demand from refiners that should raise their runs to benefit from healthier refining margins.
Spot prices, specifically in Asia, were also supported by the release of the fourth crude imports quota from the Chinese government. This should raise buying from Chinese independent refiners, although the fourth quota was lower than the previous one.
In October, WTI’s first-month price rose the most among the other main spot benchmarks, increasing by $9.90, or 13.9%, to an average of $81.36/b. North Sea Dated and Dubai’s first month rose both respectively by 12.3%, or $9.14 and $8.89, to settle at $83.54/b and $81.46/b.
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