By Chibisi Ohakah, Abuja (with agency reports)
UAE energy minister, Suhail al-Mazrouei, has said that OPEC+ can’t solve current oil market challenges alone because the world needs more energy investments to avert future oil price hikes that may impact global economic growth.
In a report by S&P Global Platts, the minister explained that the world needs more investments in various crudes from around the world, oil and gas investment incentives should be present to avert oil price hikes, Suhail al-Mazrouei reportedly told the state-run WAM news agency.
He held that the UAE, OPEC’s third biggest producer, is committed to supporting OPEC+ and working with the coalition on the monthly oil production increases in order to establish supply and demand balance.
In recent times, the OPEC+ coalition — an alliance between the organization and 10 partner countries led by Russia — has been gradually lifting its production quotas by 400,000 b/d each month, a pace that has not brought much relief to the market, with front-month Brent futures hitting a seven-year high above $88/b.
S&P Global Platts assessed Dated Brent on Jan. 18 at $88.525/b, up by 0.92% on the day. Platts hinted in the report that the OPEC+ alliance, which has been convening monthly, meets next on Feb. 2 to decide on March output levels.
Quoting the International Energy Agency describing this year as a ‘volatile year,’ the report said global oil demand is set to surpass pre-pandemic levels this year as fears over the latest coronavirus wave subside, creating the potential for another “volatile” year of oil prices.
In its monthly oil market report, the IEA raised its demand estimates by 200,000 b/d for both 2021 and 2022, to reflect clear signs that the impact on economic activity and oil demand from the omicron variant remained “relatively subdued.”
World oil demand is now seen rising by 5.5 million b/d in 2021 and by 3.3 million b/d in 2022, the IEA said, surpassing pre-pandemic levels of 99.7 million b/d in 2019.
During the final quarter of 2021, the IEA said global demand had already “defied expectations,” rising by 1.1 million b/d to 99 million b/d, an upward revision of 345,000 b/d compared with its previous report.
Meanwhile, OPEC warned yesterday of a choppy oil market ahead, between lingering COVID-19 hotspots, surging inflation and ongoing supply chain disruptions, but said the continued emergence of the world economy from the pandemic in 2022 should keep crude prices supported throughout the year.
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