Like the International Energy Agency (IEA), the cartel is aligning itself with demand growth that will approach levels before the coronavirus pandemic.
On July 15, the Organization of the Petroleum Exporting Countries (OPEC) released its monthly report in which it says it expects demand to climb 3.3 million barrels per day next year. This would equate to an average of 99.9 million barrels per day, which is within the range of demand levels in 2019.
These forecasts come against a backdrop of unequal vaccination rates and the rise of the Delta variant of the coronavirus. But for OPEC, stimulus will continue to boost oil consumption in the second half of 2021 and into the next year.
While oil prices fell by more than 1.3% on Thursday in part due to an unexpected increase in stocks of gasoline and other refined products, overall, the maintenance of stocks in rich countries below the average for the period 2015-2019, is a good indicator of market stability.
OPEC warns, however, that the expected strong economic recovery could lead to a rapid rise in inflation and, consequently, a rise in interest rates. “This could see high levels of sovereign debt becoming a huge burden on the fiscal health of many economies,” the organization said.
While OPEC has announced a deal between the UAE and Saudi Arabia, investors still fear the allies have not broken the deadlock. The announcement of the deal was the trigger for the price drop that continued with the announcement of rising inventory levels.