World crude oil demand is expected to rise by by 4.2 million barrels per day in 2022 compared to the previous year, OPEC’s Bulletin issue for December 2021-January 2022 revealed on Tuesday (Feb. 8).
The document also estimated that the world would achieve economic growth of 4.2% this year. “While some inflationary factors may qualify as temporary, the rise in wages and salaries in affected economies may turn out to be of a more sustained nature,” the Vienna-based organization said.
Oil prices dropped on Tuesday after the resumption of indirect talks between Washington and Tehran on the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear deal.
The talks reached enough progress for the draft of the final agreement to approach the finish line amid pressure for results, according to media reports.
The final deal could lead to the removal of sanctions on Iranian oil exports, increasing global supplies and bringing relief to the tight oil market and to rallying oil prices.
Brent crude, the international benchmark, has climbed around 20% in 2022 to more than $93 a barrel. Meanwhile, benchmark U.S. prices last week topped $93 a barrel, up around 65% in the last 52 weeks and the highest since 2014.
The rise has come as global consumption remains strong, there are ongoing tensions in Eastern Europe and doubts that OPEC+ will be able to deliver on a promised increase in supply. Potential supply disruptions due to cold U.S. weather conditions also supported oil prices.
“Crude oil futures eased lower as the spectre of Iranian oil hitting the market weighed on sentiment,” ANZ Research analysts said in a note on Tuesday.
Brent crude was 1.9% lower, to sell for $90.91 per barrel while U.S. West Texas Intermediate (WTI) crude lost 1.9%, going for $89.60 per barrel on Tuesday.
“Nevertheless, more bullish signals continue to emerge for oil” the added.
A day earlier, the price of OPEC basket of thirteen crudes stood at $93.42 a barrel compared with $92.84 the previous Friday, according to OPEC Secretariat calculations.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Traders will also monitor weekly reports on United States oil inventories, due Tuesday and Wednesday, respectively.