LONDON (Reuters) - OPEC and its allies meet on Monday to debate how much oil to release into the red hot market, where supply disruptions and recovering demand from the coronavirus pandemic have pushed oil above $80 per barrel.
The oil price rally to a three-year high is exacerbated by an even bigger increase in gas prices, which have spiked 300% and have come to trade close to an equivalent of $200 per barrel due to supply shortages and low production of other fuels.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, agreed in July to boost output by 400,000 barrels per day every month until at least April 2022 to phase out 5.8 million bpd of existing cuts.
Four OPEC+ sources told Reuters last week producers were considering adding more than that deal envisaged, but none gave details on how much more, or when supply would increase.
The nearest month any increase could occur is November since OPEC+’s last meeting decided the October volumes.
Rising oil, gas, coal and power prices are feeding inflationary pressures worldwide and slowing the recovery.
Global Thirst for Oil Won’t Diminish Until 2045
Oil demand will grow sharply in the next few years as economies recover from the Covid-19 pandemic, the Organization of the Petroleum Exporting Countries (OPEC) said this week in its 2021 World Oil Outlook.
According to the report, oil use will rise by 1.7 million barrels per day (bpd) to 101.6 million bpd in 2023, along with the robust growth already predicted for 2021 and 2022.
“Energy and oil demand have picked up significantly in 2021 after the massive drop in 2020,” OPEC Secretary General Mohammad Barkindo said, adding that “Continued expansion is forecast for the longer term.”
The oil cartel lowered its estimates for longer-term oil demand, saying it was expected to reach 106.6 million bpd by 2030 – down 600,000 bpd from last year’s figure and 11 million bpd lower than OPEC’s prediction in 2007 of what 2030 demand would look like.