for Global Oil Demand
The emergence of the new Omicron variant has ended, at least for the moment, the surge in oil prices that has unfolded over the course of much of this year.
OPEC+ will meet in the coming days to decide on next steps in regards to unwinding extraordinary production cuts. Meanwhile, in Glasgow, global leaders are trying to ratchet up the climate ambition.
With global oil supply outpacing demand, oil traders are shrugging off rising tensions around the Strait of Hormuz.
The return of fuel subsidies in several emerging market countries may keep oil demand growth on track, muting the price effect on consumer behavior.
Looming IMO regulations, as well as the perpetual precariousness of relying on petroleum for marine transportation in a volatile world market, have prompted shipping fleets to take a fresh look at renewable-powered propulsion.
The reasons for the positive demand revisions come from every region of the global oil market, with stronger economic activity the main reason for the more optimistic outlook.
Although shifts are taking place with EVs, autonomy, and more stringent fuel economy, it is not inevitable that we’ll shortly be in a post-oil world and that demand will peak sooner rather than later.
An extended period of upstream investment cuts and the fact that petroleum products still fuel more than 90 percent of the transportation sector could mean we’re headed for another price spike. But slower economic growth and structural shifts on the demand side could keep another bull market from occurring.
Although global balances have tightened lately, the oil market should remain in surplus for the rest of this year and throughout 2017. Fundamentals will see some periods of draws, but on average, over the next year and a half, supply is expected to remain ahead of demand, according to analysts at JBC Energy.
With China's economy slowing, India has stepped up as the world's main center of oil demand growth. This means its thirst for crude oil imports will continue to grow.