With the next OPEC+ ministerial meeting just two
weeks away, OPEC+ expressed optimism about the future demand of crude oil,
having maintained what Saudis used to call, cautious optimism, for months.
Citing the latest growth figures from China, along
with its export and import figures, the organization estimates that the demand
of crude oil will increase by 5.95 million bpd in 2021.
In addition, the OPEC+ also takes into account the rise
in the global growth from 5.1% to 5.4% as well as the estimated fall of the US
oil stockpiles for 3 weeks in a row.
Although the OPEC+ did not pay much attention to the
rising pandemic level in Europe, Asia and especially in India, seasoned oil
analysts are not prepared to sweep them under the carpet as something
irrelevant.
As far as Europe is concerned, the vaccine rollout
has not been as effective as that of the United Kingdom, due to several factors
ranging from those stem from petty politics to stubborn individual refusal to
get ‘foreign stuff’ into their bodies; the widespread concerns, sometimes blown
out of proportion, about side effects of
the vaccines did not help either.
During this week, oil markets share the optimism
expressed by the OPEC+; the price has been rising at slower, but steady rate,
perhaps in proportion to the mathematical equivalent of the optimism.
The steady rise also shows that the markets avoid responding
in knee-jerk passion to global political events; in the Middle East, for
instance, the tension between Iran and Israel escalated following a sabotage in
an Iran nuclear facility, blamed on Israel.
Today, an Israel ship, docked in a harbour in the
UAE, has been attacked, something that Israel thinks Iran is behind.
In Saudi Arabia, meanwhile, the Houthi attacks on
Saudi oil facilities continue on regular basis, recording a psychological
victory rather than any significant physical damage.
With the next OPEC+ meeting in the offing, the
optimism of the OPEC+ over the recovery of the demand of the crude oil may not change
the status quo as far as the collective output is concerned.
