By Udeme Akpan
THE Organisation of Petroleum Exporting Countries, OPEC, has put the global oil demand at 4.2 million barrels per day, mb/d as new Omicron COVID-19 variant continues to impact on the oil market. This was even as the price of Nigeria’s Bonny Light, which had risen to $85 per barrel in the fourth quarter (October – December) of 2021, suddenly dropped to $77 per barrel, indicating a decrease of $8 per barrel, yesterday.
However, in its December Monthly Oil Market Report, MOMR, obtained by Energy Vanguard, OPEC, stated; “The forecast for 2022 is also kept unchanged at 4.2 mb/d. Indeed, some of the recovery previously expected in 4Q21 is now shifted to 1Q22, followed by a more steady recovery throughout 2H22. The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges. This is in addition to a steady economic outlook in both the advanced and emerging economies.”
On supply, the organisation noted that its 2021 oil supply forecast was based on possible growth in Canada, Russia, China, United States, Norway, Guyana, and Qatar, while output was projected to decline in the United Kingdom, Colombia, Indonesia and Brazil. It stated: “Similarly, the non-OPEC supply growth forecast for 2022 is also kept unchanged at around 3.0 mb/d, to average 66.7 mb/d. The main drivers of liquids supply growth are expected to be the US and Russia, followed by Brazil, Canada, Kazakhstan.”
In any case, OPEC looks forward to working with others to achieve stability in the global market through the Declaration of Cooperation, DoC, between OPEC Member Countries and 10 non-OPEC oil-producing countries.
In its statement obtained by Energy Vanguard, the organisation stated: “The birth of the DoC built on the successful ‘Algiers Accord’, signed in Algiers, Algeria, September 28, 2016 at the 170th (Extraordinary) Meeting of the OPEC Conference and the subsequent ‘Vienna Agreement’, decided on November 30 of the same year in Vienna, Austria, at the 171st Meeting of the OPEC Conference.
The Declaration of Cooperation is an unprecedented collaborative framework of leading oil producers that saw the need to come together during a critical juncture in the global oil industry.
“If it was not for this group of countries and the courageous act that they have undertaken, the oil sector would, without a doubt, be in a different situation. Looking back to 2016, very few believed that the collaborative efforts would grow and evolve into a major, robust cooperative force to help restore much needed stability in the global oil market. However, the 23 oil-producing countries have continued to rise to the challenges they have encountered, including instrumenting effective and visionary policies to combat the devastating impact of the COVID-19 pandemic.”
“The inaugural OPEC and non-OPEC Ministerial Meeting saw participating countries take several decisions in view of oil market conditions and prospects in the short and medium terms, as well as in recognition of the need for joint cooperation by oil producers to achieve sustainable oil market stability in the interest of producers, consumers, investors and the global economy. It also recalled the rights of peoples and nations to permanent sovereignty over their natural wealth and resources.
“Non-OPEC participants adopted a voluntary downward production adjustment, supporting OPEC’s decision of the 171st Meeting of the OPEC Conference. Additionally, three non-OPEC countries joined the high-level ministerial monitoring committee established through the ‘Vienna Agreement’, which is mandated to review the decisions’ successful implementation. The Ministers also highlighted the importance of strengthening cooperation at the technical level.
“In response to the severe oil market contraction caused by the COVID-19 pandemic, the DoC’s 23 countries adopted the largest-in-size and longest-in-time voluntary oil production adjustment in the history of OPEC and the oil industry, demonstrating their continued commitment to a stable oil market.”