The Organisation of Petroleum Exporting Countries (OPEC) has increased its forecast for global oil demand in the first quarter substantially.
OPEC boosted estimates for consumption in the period by 1.1 million barrels a day -- equivalent to annual world consumption growth in a typical year before the pandemic -- according to a monthly report from the group’s research department.
“The impact of the new Omicron variant is projected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges,” the report said.
The revision means that OPEC and its allies will not create as big a surplus when they proceed with plans to continue reviving oil production in January.
The decision to add barrels, taken earlier this month, surprised traders because markets remain so fragile. It was widely interpreted as a gesture of political goodwill from Saudi Arabia to the U.S.
Oil prices have nonetheless largely held up, Bloomberg reported, with crude trading near $75 (€67)a barrel in London, as initial signs show that demand has not yet suffered from the latest virus outbreak.
OPEC’s decision to technically keep its meeting in session -- leaving the door open to reversing the supply increase at short notice if needed -- is also shoring up sentiment.
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