OPEC: Demand will grow – 06 November 2022
The price increases follow a revised outlook from the Organization of the Petroleum Exporting Countries released on Oct. 31, which raised estimates of global oil demand over the medium to long term.
Prices were further supported by data from the US Energy Information Administration released on November 2, which showed a significant decline in US oil reserves.
ANS rose on November 1, adding $1.36 to close at $94.35. WTI jumped $1.84 to close at $88.37, but Brent edged down 18 cents to close at $94.65.
The US dollar fell against other currencies on November 1, which boosted oil prices.
Prices were also inflated by a late October 31 Twitter entry by renowned Chinese economist Hao Hong who said a “reopening committee” formed and led by permanent Politburo member Wang Huning was reviewing COVID data from the United States. States, Hong Kong and Singapore to assess various reopening scenarios, targeting a March 2023 reopening.
Prior to this tweet, oil markets had been spooked by demand fears due to China’s strict COVID-19 lockdowns, which led to lower factory output in October.
ANS fell $1.28 on October 31 to close at $92.99, WTI fell $1.37 to close at $86.53 and Brent fell 94 cents to close at $94.83 .
On October 28, ANS lost $1.04 to close at $94.27, WTI fell $1.18 to close at $87.90 and Brent fell $1.19 to close at 95, $77.
From Wednesday to Wednesday, ANS posted a gain of 74 cents, rising from a close of $95.37 on October 27 to $96.11 on November 2.
OPEC is optimistic about the future
To meet future energy demand, the world will need to add an average of 2.7 million barrels of oil equivalent per day each year until 2045, OPEC said in its 2022 World Petroleum Outlook released on Oct. 31.
Oil demand is expected to rise from 88.3 million boepd in 2021 to 100.6 million boepd in 2045, with oil’s share of the energy mix falling from 31% to just under 29%, OPEC said. , adding: “Despite the deceleration in oil demand growth, oil is expected to retain the highest share in the global energy mix over the entire period.
Despite near-term market distortions, OPEC projects natural gas demand will grow by 19 million boepd by 2045, driven by demand across all sectors and displacing the use of coal and traditional biomass . By 2030, gas should overtake coal and become the second fuel in the energy mix.
Coal is the only primary fuel that is expected to experience a decline in demand over the projection period, from 75 million boepd in 2021 to 58.2 million boepd in 2045.
“Energy intensity is expected to decline in all regions, driven by increased energy efficiency in end-use and transformation, as well as the growing share of renewables,” OPEC said. “The biggest improvements are expected in China and India.”
OPEC said the share of fossil fuels has remained stable at more than 80% for more than 30 years, and that the share of oil and gas in the mix is also stable, hovering around 55%. He said the share of fossil fuels in the mix remained stable despite strong growth in renewables in some countries – particularly wind and solar – amid strong political support and falling costs.
The ability of countries to implement the adoption of net zero emissions and/or carbon neutrality targets for 2050 or beyond remains highly uncertain, especially given a recent backsliding due to geopolitical tensions current events and the crisis in the energy market, OPEC said.
The global economy is expected to more than double in size and the world’s population to grow by 1.6 billion by 2045, OPEC said.
Global primary energy demand is expected to continue to grow over the medium to long term, increasing significantly by 23% by 2045, he said.
“The WOO 2022 once again underscores the increasingly complex nature of the global oil and energy industries,” OPEC Secretary General Haitham Al Ghais said at the launch of the publication at the Abu Dhabi International Petroleum Exhibition and Conference.
“It is a difficult environment, which requires expert analysis to help us meet both the challenges and the opportunities ahead,” he said.
Sharp drop in US oil
For the week ending October 28, U.S. commercial crude oil inventories – excluding the Strategic Petroleum Reserve – fell 3.1 million barrels from the previous week to 436.8 million barrels , which is 3% below the five-year average for the time of year, according to data released by the EIA on November 2.
Total motor gasoline inventories for the period fell 1.3 million barrels, 6% below the five-year average for the time of year, the EIA said.
The American Petroleum Institute said on November 1 that commercial crude inventories in the United States had risen by about 25 million barrels so far this year, according to its data, while SPR levels fell by 194 million barrels – more than seven times more than commercial stocks had increased.
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