OPEC+ expects a big oil glut in early 2022

OPEC+ expects the global oil market to show a worse-than-expected surplus in the first quarter of 2022, according to an internal report seen by Reuters. Reuters, which could give the group another reason to pause monthly view extensions.

The report, seen by Reuters, showed that OPEC+ now expects a surplus of 2 million bpd in January, 3.4 million bpd in February and 3.8 million bpd in March.

The internal document also gave initial insights into OPEC+ thinking about the potential impact of the Omicron COVID variant on global oil demand.

Currently, the group’s experts are of the opinion that the impact of the new variable is related to jet fuel, especially in Africa and Europe.

After the discovery of the new variant, many countries banned flights from South Africa and other African countries, some – such as Israel and Japan – closed borders to foreign visitors, while others, such as the United Kingdom, closed Tighter requirements To enter by requiring all foreign visitors – regardless of vaccination status – to take a PCR test and self-isolate until they receive a negative result.

“Demand for transport fuels within Europe may also be affected,” says the OPEC+ internal report seen by Reuters.

The new alternative emerged as some European countries announced stricter restrictions to curb the rise in the number of coronavirus cases, including a complete lockdown in Austria.

Earlier this week, an internal report prepared for the OPEC+ Technical Committee meeting I saw energy intelligence It showed that global oil inventories are set to rise next year at a faster pace than previously expected.

The report analyzed oil market conditions before Friday, falling oil prices As a reaction to the Omicron variable, which caused Brent crude to drop to as low as $70 a barrel, while West Texas Intermediate crude fell below $70 a barrel.

OPEC and OPEC+ begin meetings on Wednesday to discuss production policy for January. OPEC and the Joint Technical Committee (JTC) meet on Wednesday, to be followed by a ministerial meeting of the full OPEC + group on Thursday, after which decisions will be announced.

By Tsvetana Paraskova for Oilprice.com

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