HomeNewsOPEC+ Committee Trims 2022 Oil Surplus Forecast

OPEC+ Committee Trims 2022 Oil Surplus Forecast

2/1/2022

LONDON (Reuters) - The OPEC+ Joint Technical Committee (JTC) expects the overall surplus in 2022 to reach 1.3 million barrels per day (bpd), slightly less than its previous forecast of 1.4 million bpd, a report prepared by committee and seen by Reuters showed.

The JTC met on Tuesday ahead of Wednesday's ministerial meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+.

The committee kept the forecast for world oil demand growth unchanged for 2022 at 4.2 million bpd, noting that it expected it to rise to pre-pandemic levels in the second half of the year.

It noted, however that a number of risks continue to linger over the oil market, including "significant uncertainties" associated with the potential impact of the Omicron coronavirus variant, ongoing supply chain bottlenecks and central bank policy to counter inflation.

The JTC also flagged other risks to the oil market recovery, citing volatility in commodity markets, restraints on oil production capacity from underinvestment, the challenge of high sovereign debt levels in many regions and geopolitical risks.

Brent crude prices were trading at about $89 a barrel on 1756 GMT, not too far from the seven-year high of $91.70 reached last week, driven largely by geopolitical tensions.

Five OPEC+ sources told Reuters on Tuesday they expected ministers meeting on Wednesday to agree to go ahead with a planned increase of 400,000 bpd in March, despite high oil prices.

Goldman Sachs said in a note there was a chance of a faster OPEC+ ramp up given the pace of the market's recent rally.

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