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2022 Oil Demand Expected to Stay Below 100MM Barrels Per Day


In a new report sent to Rigzone this week, Standard Chartered forecasted that overall 2022 global oil demand will stay below 100 million barrels per day.

In the report, the company projected that demand will increase from 97.5 million barrels per day (MMbpd) in 2021 to 98.9 MMbpd this year. Looking at specific quarters, the forecast expects second quarter demand to come in at 97.3 MMbpd, third quarter demand to come in at 99.4 MMbpd, and fourth quarter demand to come in at 100.5 MMbpd.

OECD oil demand will rise by 1.07 MMbpd year on year and account for 45.8 MMbpd of the total 2022 forecast, while non-OECD demand will rise by 0.37 MMbpd and account for the remaining 53.1 MMbpd, according to the report. North America demand is expected to rise by 1.66 MMbpd year on year and make up 26.8 MMbpd of the 2022 forecast.

The International Energy Agency (IEA) and Energy Information Administration (EIA) 2022 oil demand forecasts, which were highlighted in Standard Chartered’s report, also see overall global oil demand coming in below 100 MMbpd this year.

The IEA expects this figure to rise from 97.5 MMbpd in 2021 to 99.4 MMbpd in 2022 and the EIA expects demand to increase from 97.4 MMbpd in 2021 to 99.8 MMbpd in 2022.

Significant Downside Risk to Demand

Standard Chartered analysts warned in the company’s report that they think there is a significant downside risk to 2022 oil demand growth and stated that they do not discount the possibility that oil demand growth will be negative.

“There are several areas of concern,” the analysts stated in the report.

“We think U.S. oil demand is likely to disappoint; January data proved very weak after revision and prompter unrevised data for March and April suggests that the weakness has continued,” the analysts added.

“Our concerns about U.S. demand mean our 2022 growth forecast (464,000 barrels per day) is well below the EIA’s (796,000 barrels per day), although we are still more optimistic than the IEA (280,000 barrels per day),” the analysts continued.

In the report, Standard Chartered’s analysts also noted that Covid-related lockdowns have caused second quarter China oil demand forecasts to fall significantly, in line with GDP forecasts, and said Russia’s oil demand is likely to weaken further in the face of an economic downturn.

“In addition, there are price effects across both OECD and non-OECD economies, with early data suggesting that Indian oil demand may have proved particularly sensitive to the spike in prices,” the analysts stated.

Volatility Prevails

In a separate report sent to Rigzone last week, analysts at Standard Chartered noted that oil price volatility had been mirrored by volatility in estimates of key fundamental indicators.

“Oil traders and forecasters have been attempting to gauge the relative sizes of the supply and demand downside in the wake of Russia’s invasion of Ukraine, economic uncertainty, high prices and China’s anti-Covid measures,” the analysts stated in the report.

“Our view is that the downside to Russian oil output is large, but so is the potential downside to demand,” the analysts added.


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