A strong recovery in global oil demand next year could accelerate the pace of inflation and pressure countries with high debt levels, the Organization of the Petroleum Exporting Countries said Thursday.
In a monthly report, OPEC made its first 2022 forecasts for the global oil market, saying it expects the world’s appetite for crude to rise by 3.3 million barrels a day to average 99.9 million barrels a day. That echoes forecasts made in June by the International Energy Agency, which expects demand to return to pre-pandemic highs by the end of next year.
Despite uneven vaccination rates and the rise of the Delta coronavirus variant, the cartel expects pandemic-containment measures and stimulus measures to spur oil consumption in the second half of 2021 and next year. With wealthy countries’ oil stocks back below their 2015-2019 averages, OPEC warned that a strong economic recovery could lead to rapidly rising inflation, and consequently, higher interest rates. That could see high sovereign debt levels become a “considerable burden for the fiscal health of many economies,” the Vienna-based organization said.
Oil prices edged down Thursday, with Brent crude, the global benchmark, falling 1.7% to $73.47 a barrel. West Texas Intermediate futures, a key U.S. gauge, fell 2% to $71.65 a barrel.
Both benchmarks were also down Wednesday, after Energy Information Administration data showed an unexpected increase in stocks of gasoline and other refined products, according to ING analyst Warren Patterson.