The oil market reacted to reports of low stockpiles in the United States on Thursday, with Brent hitting a new high of $77.26 a barrel.
The Brent price had been hovering at $76 per barrel the day before, despite the Organization of Petroleum Exporting Countries’ (OPEC) struggles to maintain stability.
However, the speculative market was impacted by the Energy Information Administration report, which revealed a 3.5 million barrel crude oil inventory draw for the week to September 17, 2021.
As a result, the price of Bonny Light, Nigeria’s premium grade, increased to $74.32 per barrel from $73, representing a $17.32 per barrel premium above the $57 per barrel reference price in the country’s 2021 budget, which was based on 1.8 million barrels per day output.
OPEC, on the other hand, indicated in its August Monthly Oil Market Report, MOMR, received by Vanguard, that the market was still beset by uncertainties.
According to the report, “Oil demand in the third quarter of 2021 has proved to be resilient, supported by rising mobility and travelling activities, particularly in the Organisation for Economic Co-operation and Development, OECD. At the same time, the increased risk of COVID-19 cases primarily fueled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to fourth quarter of 2021 estimates.
“As a result, 2H21 oil demand has been adjusted slightly lower, partially delaying the oil demand recovery into 1H22. Global oil demand in 2021 is now estimated to average 96.7 mb/d. In 2022, oil demand is expected to robustly grow by around 4.2 mb/d, some 0.9 mb/d higher compared to last month’s assessment.”
When OPEC presents its World Oil Outlook next week, a more accurate picture of the world market will however emerge.
“The 2021 OPEC World Oil Outlook (WOO) will be launched via videoconference in Vienna, Austria, on Tuesday, 28 September 2021 at 14:30 (CEST),” the organization said.
“OPEC’s Secretary General, Mohammad Sanusi Barkindo, will present the major findings of the WOO 2021, as well as introduce a video with key messages from the publication’s 15th edition. This will be followed by a panel discussion and a Q&A with management and analysts from OPEC’s Research Division.
“The WOO was first published in 2007 and provides an in-depth review and analysis of the global oil and energy industries, offering a thorough assessment of various sensitivities in the medium- and long-term development of the oil industry.
“The publication provides insights into the upstream and downstream, supply and demand, investments, the potential impact of policies, and the environment and sustainable development. It also provides expert analysis of many of the challenges and opportunities facing the global oil industry. This year’s edition captures a long-term horizon out to 2045.”
Initially, the OPEC Secretary General, Mohammad Barkindo said, “This year’s WOO 2021 has been put together under the restraints and restrictions caused by COVID-19. It is testament to the hard work of all those involved, and the value the Organization places on transparency and the enhancement of dialogue and cooperation. Teamwork and collaboration has never been more important, and we hope the flagship annual publication will help further understanding of global oil and energy markets among all stakeholders.”
