OPEC says 2022 global demand will reach pre-pandemic levels, as oil price hits 6-week high

The Organisation of Petroleum Exporting Countries (OPEC) reckons that oil demand in 2022 could hit pre-pandemic levels.

This comes as oil prices hit 6-week highs with the Brent crude price up by US$0.59 or 0.8% to US$73.51 a barrel and the US Nymex crude price adding US$0.73 or 1.0% to US$70.45 a barrel.

OPEC’s Oil Market Report for September predicts that in 2022 oil demand is expected to grow by around 4.2 mb/d.

The report indicated that demand will be driven by both Organisation for Economic Co-operation and Development (OECD) countries and non-OECD countries.

“Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding pre- pandemic levels,” the report said.

“The global economic recovery, in combination with a considerable rebound in mobility, significantly lifted oil demand growth in 1H21.”

“While this dynamic is forecast to soften towards the end of 2021, the overall positive trend has led to projected global oil demand growth of 6.0 mb/d for 2021, followed by growth of 4.2 mb/d in 2022.”

Supply side still a bit wobbly

On the supply side, the forecast for the rest of 2021 was adjusted downward due to outages in North America from a fire on a Mexico’s offshore platform.

Not to mention the disruptions caused by Hurricane Ida – as oil installations along the US Gulf Coast seek to restart.

But non-OPEC supply is expected to grow by 0.9 mb/d in 2021, followed by forecast growth of 2.9 mb/d in 2022.

“Numerous uncertainties, including the continued COVID-19 impact on the global economic recovery, will require continued coordinated policies, including the commendable efforts undertaken by OPEC and non-OPEC oil producers participating in the Declaration of Cooperation (DoC), to ensure stability and balance for the global oil market,” OPEC said.

Here some oil players with news out today who could be set to benefit:

Brookside Energy (ASX:BRK) +6.7%

The company was up 6.7% today off the back of news it started producing and selling oil and gas from its Jewell Well in the SWISH Area of Interest (AOI) in the world-class Anadarko Basin in Oklahoma, USA.

Oil and gas flow rates for the Jewell Well are already approaching the company’s pre-drill base case volume estimates and material volumes of oil and gas have already been sold into the market – with oil trucked to a nearby pipeline terminal and gas transported via pipeline to a DCP Midstream gas processing plant.

“Today marks a major milestone in the early life of our company with our first operated horizontal oil and gas well in the SWISH AOI, successfully turned to sales just 4-months after the well was spudded,” Brookside managing director David Prentice said.

“Our industry operates around the clock, and we have little time to reflect on this success as we move forward with the Rangers Well, the next well in our potential 5-year, 20-plus well development drilling program, and we look forward to bringing everyone news on that front and importantly the ongoing production performance of the Jewell Well over the coming weeks.”

The company said the combination of premium quality light sweet crude and liquids rich gas production and an unhedged book allows it to take full advantage of the current strength of oil, gas and natural gas liquids (NGL) prices and all future price upside.

Otto Energy (ASX:OEL) unchanged

The company’s share price was unchanged today after it announced the restart of its Gulf Coast operations port Hurricane Ida.

Otto’s offshore production was shut down as a precautionary measure and – with no damage reported – the SM 71 well recommenced production on 10 September and the GC 21 well recommenced production on 11 September.

“After the devasting impacts of Hurricane Ida to so many, and such across such a broad area of the Southern and Eastern US, Otto is fortunate to not have sustained any damage to our offshore assets at SM 71 or GC 21,” executive chairman Mike Utsler said.

“It has taken multiple days for offshore and onshore operators, combined with the incredible efforts of so many, to assess the impacts and restore power, utilities and services.”

“Otto’s Lightning asset (Texas) continued to produce over this time and was not affected by Hurricane Ida and its subsequent impacts.”

“All of Otto’s assets are now back in production.”