Goldman Sachs expects average oil demand to reach record levels in the next two years on the back of increased demand for aviation and transportation as well as infrastructure construction.
“You already had record-high demand before the latest corona mutation, and you are adding higher demand for aircraft and the global economy is still growing,” said Goldman’s head of energy research, Damien Corvalin.
“You will see how we will average a new record level of oil demand in 2022, and again in 2023,” he added.
Corvalin noted that while the recovery has hit a speed bump with the high incidence of Omicron in parts of the Northern Hemisphere during the winter, coronavirus cases have risen; However, closings have remained limited, with the commuting data also showing a limited impact.
Goldman Sachs sees a steady growth in global demand for oil until the end of this decade to about 106 million barrels per day, expecting a gradual transition in the energy transition.
Corvalin emphasized that electric cars will reduce the demand for gasoline, but that trucks and planes are still a long way from decarbonizing.
“You sell roughly 6 million electric cars (electric vehicles) a year now, and that’s only a small piece in the 100,000 barrels per day oil demand,” he said.
He explained that for energy fuels, mild temperatures this winter and increased coal production in China, the largest producer and consumer, have curbed LNG prices in Asia.
Oil supply from outside OPEC
OPEC kept its forecast for the growth of non-OPEC oil supply unchanged at 3.02 million barrels per day, next year, which means that the total will remain at 66.67 million.
While the Energy Information Administration cut estimates for non-OPEC oil supply growth to 3.03 million barrels per day in 2022, down 200,000 barrels per day from previous expectations.
This means that the total non-OPEC oil supply is likely to reach 67.03 million barrels per day next year.
In contrast, the International Energy Agency expects strong global oil supply growth of about 6.4 million barrels per day next year, with an increase from non-OPEC + countries of 1.8 million barrels per day.
The IEA believes that from December, supply will be greater than demand, with supply growth in the United States and the OPEC+ alliance.