Oil in 2022: Supply to exceed demand; surplus likely to build

Oil in 2022: Supply to exceed demand; surplus likely to build

2021 was a good year for all and the OPEC+ managed markets well to maintain a balance and oil inventories low. The scene in 2022 will be driven by several factors such as COVID-19 and its variants’ impact on demand and economy, falling OPEC+ spare capacity, and some countries inability to meet their production quota, non-OPEC production hike especially from the US and Brazil, the release from strategic petroleum reserves from several countries, lower upstream investment, risk of disruptions in Libya and Iran’s nuclear talks. Much of the supply momentum through the medium range is related to projects approved before the pandemic. The energy transition efforts will also have an impact on the market in the medium term due to underinvestment, which will cause volatility in prices. However, demand will be stronger in the second half of the year, driven by a more robust recovery in global jet fuel demand. While the Middle East, Asia, and Latin America will surpass 2019 throughput levels, the recovery in Europe and the US will continue to lag. Risks remain focused on the impact from the omicron variant, supply chain constraints, inflation trajectories, geopolitics, and central bank policies. var width=document.documentElement.clientWidth;if(width>=320&&width<728){}; googletag.cmd.push(function(){try{var d=document.documentElement.clientWidth;var a;var c="/21857811890/en.zcom/";var