The Organization of the Petroleum Exporting Countries (OPEC) on Thursday stuck to its prediction of a strong recovery in world oil demand in 2021 and further growth next year, despite concerns about the spread of the delta coronavirus variant that has weighed on prices.
OPEC said in a monthly report it expects demand to rise by 5.95 million barrels per day (bpd) this year, or 6.6%, unchanged from last month's forecast.
"The global economy continues to recover," OPEC said in the report. "However, numerous challenges remain that could easily dampen this momentum. In particular, COVID-19-related developments will need close monitoring."
OPEC's confidence that demand will shrug off the latest setback caused by the pandemic contrasts with that of the International Energy Agency, which trimmed its outlook on Thursday.
In 2022, fuel use will expand by 3.28 million bpd, OPEC said, a forecast also unchanged from last month.
Oil was trading above $71 a barrel after the report was released. Prices have risen to pre-pandemic highs above $77 this year, boosted by economic recovery hopes and OPEC+ supply cuts, although concern about the delta variant has weighed.
OPEC raised its forecast of 2021 world economic growth to 5.6% from 5.5% assuming the impact of the pandemic will be contained, although it warned of "significant uncertainties." The outlook for 2022 was raised by the same increment to 4.2%.
"The path of the COVID-19 pandemic will be the overarching factor impacting the near-term pace of the recovery, with the potential emergence of new COVID-19 variants and/or mutations posing a particular risk," OPEC said.
OPEC and its allies, known as OPEC+, are gradually unwinding record oil output cuts put in place last year when the pandemic hit demand, and in July they agreed to gradually boost output by 400,000 bpd a month from August.
The report showed output rose in July by 640,000 bpd to 26.66 million bpd, as Saudi Arabia unwound the rest of a voluntary supply cut it had made to support the market.