Global oil market to flip into surplus in 2022

Oil&Gas Materials 27 January 2022 17:07 (UTC +04:00)
Global oil market to flip into surplus in 2022

BAKU, Azerbaijan, Jan.27

By Leman Zeynalova – Trend:

The global oil market will flip into a surplus in 2022, Trend reports with reference to the UK-based Capital Economics research and consulting company.

“We expect global demand to rise by 3.0m bpd in 2022, down from an estimated increase of 5.3m bpd in 2021, while supply should rise by 6.6m bpd, up from a 1.3m-bpd gain in 2021. Over half of the increase in supply will come from the unwinding of the OPEC+ collective output cut. We don’t expect it to meet its target quotas, but the increase in output will still be substantial,” reads a report released by Capital Economics.

The company continues to forecast that energy prices will fall this year, but by less than it had previously anticipated.

“This is primarily because supply has been a little slower to respond than we expected, which has meant that stocks have declined substantially. As a result, even if supply continues to rise from here as we expect, a rebuilding of stocks should provide somewhat of a floor under prices this year,” the report says.

Capital Economics notes that energy prices have had a strong start to the year.

“Coal prices in Asia have undergone a renewed surge following the decision by the Indonesian government to ban coal exports in January to shore up domestic supply, although the ban has since been eased. Coal prices in Europe also rose, but by less because Europe is not as dependent on Indonesian coal. In any case, coal prices generally remain sensitive to renewed shocks to supply, given the low level of stocks available to be drawn down,” says the company.


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