Threat by some countries to release 70 million barrels of crude oil from their strategic reserves is being monitored, the Organisation of Petroleum Exporting Countries (OPEC) said yesterday.
The threat followed the oil cartel’s refusal to raise its supply to the global market, despite rising demand.
OPEC’s Secretary-General, Mohammad Sanusi Barkindo, who dropped the hint ahead of its 58th Meeting of the Joint Technical Committee, said the monitoring became necessary to forestall member countries’ plan to flood the market with their stockpiles.
He said: “We will continue to monitor the potential near-term impacts if some leading consuming countries carry through with their announced plans to release an estimated 70 million barrel from their strategic oil reserves.”
Barkindo said looking at the inventory, preliminary data showed that total OECD commercial stocks fell by 16 million barrels month-on-month in November 2021 to 2.721 billion barrels.
The figure is 389 million barrels lower than the same month one year ago and 211 million barrels below the 2015-2019 average.
“We will continue to monitor the potential near-term impacts if some leading consuming countries carry through with their announced plans to release an estimated 70 million barrel from their strategic oil reserves”
He added: “However, today (yesterday), we will particularly focus on the prospects for a global supply surplus developing this year.”
The OPEC scribe recalled that at the 23rd OPEC and non-OPEC Ministerial Meeting on December 2, 2021, the ministers agreed that the meeting would “remain in session pending further developments of the pandemic and continue to monitor the market closely and make immediate adjustments if required.”
Barkindo said that despite the ongoing uncertainties, “we are witnessing, this flexible approach has helped provide an added sense of stability, reassurance and continuity to the market and investors.”
Sharing a latest market growth from the Secretariat’s latest outlook for the oil market with the conference, he said that in terms of the economy, the global GDP growth forecast for 2021 has been revised down slightly to 5.5 per cent, from 5.6 per cent last month, while the 2022 growth forecast remains unchanged at 4.2 per cent.
Barkindo said: “In a sign of our world’s economic resilience, a new study by the Centre for Economics and Business Research in the UK estimates that global economic output will surpass $100 trillion in 2022, two years earlier than expected.
“Our world has learned several hard lessons over the past two years, and many economies are now better equipped today to manage COVID-19 and its side-effects.”
He said OPEC expects a slowdown in economic growth momentum in the coming weeks, saying the oil body predicated its forecast on the significant degree of uncertainty that would permeate the early weeks of the year, despite the steady progress that global economy has made in terms of recovery.
Barkindo said despite the steady progress that has been made in terms of the economic recovery, “we do expect significant levels of uncertainty in the weeks to come, which could slow the growth momentum.”
He said looking at demand, “we foresee world oil demand increasing by 5.7 mb/d in 2021 and by 4.2 mb/d, both unchanged from last month, saying world total demand in 2021 is now pegged at 96.5 mb/d and at 100.6 mb/d in 2022, surpassing pre-pandemic levels.”
He said some of the recovery previously expected in the fourth quarter of 2021 (4Q21) has now shifted to first quarter 2022 (1Q22), followed by a more steady recovery throughout 2H22, though risks are skewed towards the downside.
Barkindo said in terms of the supply-side for 2022, non-OPEC supply growth is forecast at 3.0 mb/d for an average of 66.7 mb/d, also unchanged from last month.
SOURCE: TheNation