LONDON: OPEC has maintained its forecast that global oil demand will exceed pre-pandemic levels in 2022, although the producer group said the Russian invasion of Ukraine and developments around the coronavirus pandemic pose a considerable risk.

In a monthly report released on Tuesday, the Organization of the Petroleum Exporting Countries maintained its forecast that global oil demand would increase by 3.36 million barrels per day in 2022, extending a recovery from the 2020 recession.

The war in Ukraine briefly sent oil above $139 a barrel in March, the highest since 2008, adding to inflationary pressures. COVID-19 lockdowns in China, where an outbreak in Beijing prompted the resumption of mass testing, dampened demand for oil.

“Looking ahead, current geopolitical developments and the uncertain unfolding of the pandemic towards the end of the second half of the year continue to pose a significant risk to the projected recovery to pre-pandemic levels,” the statement said. OPEC in the report.

HIGHLIGHTS

OPEC maintained its forecast that global oil demand would increase by 3.36 million barrels per day in 2022, extending a recovery from the 2020 recession.

The organization maintained the forecast for global economic growth this year at 3.5%.

OPEC and its allies are increasing output in monthly increments after record cuts put in place during the worst of the pandemic in 2020.

“Inflationary pressures are expected to persist and it remains highly uncertain when the geopolitical issues can be resolved. Nonetheless, oil demand is expected to reach healthy levels in the second half of this year.”

The report expects global consumption to surpass the 100 million bpd mark in the third quarter, in line with previous projections, and the 2022 average to reach 100.29 million bpd, just above the rate of before the pandemic in 2019.

OPEC kept forecasts for global economic growth this year at 3.5%, adding that the decline “remains significant” and the upside “fairly limited”.

Oil extended an earlier gain after the report was released, trading again above $123.

Production

OPEC and its allies, including Russia, known as OPEC+, are increasing output in monthly increments after record cuts put in place during the worst of the pandemic in 2020.

The OPEC report showed that trend continued in May and said OPEC production fell by 176,000 bpd to 28.51 million bpd due to losses in Libya, Nigeria and In other countries.

The forecast for non-OPEC supply growth in 2022 has been cut from 300,000 bpd to 2.1 million bpd. OPEC cut its Russian production forecast by 250,000 bpd and kept its estimate of US production growth stable.

OPEC expects supply of U.S. tight oil, another term for shale, to increase by 880,000 bpd in 2022, unchanged from last month, despite high prices which in previous years have encouraged growth.