After recording a spectacular rebound in 2021, oil was a huge success in 2022.
Recently, the market, which should have suffered a swelling surplus, has surpassed $ 80 a barrel as global demand has curbed Omicron varieties and many supply constraints have hit producers from Canada to Russia.
Global oil demand surged in 2021 as the world began to recover from the coronavirus pandemic. Despite efforts to reduce fossil fuel consumption to mitigate climate change, global consumption could set a new record in 2022.
According to the International Energy Agency, crude oil consumption in 2022 is expected to reach 99.53 million barrels / day from 96.2 million barrels / day last year. That would be less than 99.55 million barrels of daily consumption in 2019.
Such a rally would be bad news for a country that consumes a lot of fuel. It will also be a big blow to US President Joe Biden, who has spent a lot of time and effort lowering prices and coordinated the global release of strategic petroleum reserves.
A bright oil perspective will put pressure on both OPEC and the US shale industry to meet demand. A year after major producers overwhelmed supply and were surprised at the recovery of activity with tight inventories around the world.
In fact, fluctuations in oil prices are felt more sensitively and quickly than any other product, as they are almost immediately passed on to the cost of final products such as gasoline, diesel and jet fuel.
Riots broke out across Kazakhstan this month after the Kazakh government allowed prices to rise for liquefied petroleum gas, a major road fuel.
However, OPEC reduced its estimates of global oil market surpluses this quarter. In the first three months of 2022, we saw a surplus of 1.4 million barrels per day, about 25% smaller than we estimated more than a month ago. The main impetus for change was the weak outlook for supply from coalition rivals.
While many OPECs have struggled to increase production, the US shale industry needs to meet investor demands and maintain spending lines.
In the future, forecasters say crude oil prices may resume their uptrend in 2022 unless supply increases more than expected.
Researchers at Bank of America estimate that Brent will average $ 85 per barrel in 2022 due to low inventory and lack of spare capacity.
Certainly, there are obstacles.
The largest unknown is a variant of Omicron coronavirus. Many countries are re-imposing travel curbs, which negatively impacts the aviation industry and consumption.
China’s worst Covid-19 outbreak since its first rekindling in Wuhan could upset oil streak by squeezing demand growth for the world’s largest oil importers.
The threat of the US Federal Reserve’s hike rate to counter rising inflation could put pressure on oil as it pushes the dollar up, making oil more expensive for holders of other currencies.
But so far, the market remains bullish.
With option deals that investment banks demand higher prices and evoke the prospect of a crude oil spiral above $ 100, this product could add to the pain of inflation felt by major consumers.
In the long run, oil companies say that the future of global energy is expected to increase demand and population, and crude oil will be an important fuel for decades to come. And the world needs a stable oil market with price balance.
http://www.gulf-times.com/story/707822/After-spectacular-2021-rebound-oil-market-stays-bu After the spectacular 2021 rebound, the oil market remains bullish in 2022