OPEC sees well supported oil market in 2022, despite Omicron

OPEC on Tuesday stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron coronavirus variant and expected interest-rate hikes, predicting that the oil market would remain well supported through the year.

In a monthly report, The Organization of the Petroleum Exporting Countries (OPEC) said it expected world oil demand to rise by 4.15 million barrels per day (bpd) this year, unchanged from its forecast last month.

"Monetary actions are not expected to hinder underlying global economic growth momentum, but rather serve to recalibrate otherwise overheating economies," OPEC said in the report.

"The oil market is expected to remain well-supported throughout 2022."

World consumption is expected to surpass the 100 million bpd mark in the third quarter, in line with last month's forecast. On an annual basis according to OPEC, the world last used over 100 million bpd of oil in 2019.

"While the new Omicron variant may have an impact in the first half of 2022, which is dependent on any further lockdown measures and rising hospitalization levels impacting the workforce, projections for economic growth remain robust," OPEC said.

OPEC and its allies, known as OPEC+, are gradually unwinding record output cuts put in place last year. At its last meeting, OPEC+ agreed to boost monthly output by 400,000 bpd in February, despite concern about the new variant.

The report showed OPEC output in December rose by 170,000 bpd to 27.88 million bpd, a smaller rise than OPEC is allowed under the deal.

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