Global Oil prices have tumbled, yet the OPEC+ sees
the light at the end of the tunnel, after revising its previous gloomy forecast
for the first quarter, 2022; the cartel sees an increase in demand for the
period, despite the risk of global spread of the Omicron variant of the Coronavirus.
Its latest forecast clearly shows that the growth of
demand for the crude oil in the next few years ahead: in the next 25 years,
says the OPEC+, the global demand will grow by 17.6%.
In the OECD countries, however, the data shows a
decline in growth by 7.6% that could be accounted for by the anticipated growth
of the renewables.
In the non-OECD countries, on the other hand, there
is a clear growth of 25.5%; it means, the fossil fuels are not going to go away
as far as the majority of the global population is concerned, despite the
ambitious net zero targets.
In the US, meanwhile, the crude oil inventories
continue to fall at a modest phase, clearly owing to the fall of crude oil
prices recently. The latest data, released by the API, American Petroleum
Institute, shows a drop of over 800,000 barrels during the past week.
It indicates that the higher the crude oil price,
the lower the demand as far as the recent US crude inventories are concerned;
the rising inflation in the US, the highest in 40 years, in these
circumstances, does not help the crude oil markets find its right bearings in
the shadows of uncertainties.
The rising inflation is affecting the other
countries as well like the plague, which in turn makes people cautious, when it
comes to spending. That is why it is important for the OPEC+ to listen the
grievances of the global consumers, especially when the world is grappling with
a once-in-a-century pandemic.
In normal times, OPEC+ has a right to let the
markets determine the crude oil prices by factors associated with demand and
supply alone; this, however, is not a normal time; in an extraordinary time,
every global body has to exercise flexibility and the OPEC+ is no exception.
It goes without saying that any long-term damage to
the global economy is going to boomerang on the OPEC+ - in the end.
When the pandemic hit last year, the governments
across the world came up with ad-hoc solutions in order to save the corresponding
populations: in the West, for instance, the governments launched furlough schemes
and employee-support schemes, in addition to countless welfare measures; even
in the less fortunate countries, the governments did their best to alleviate the
hardships.
As a result of these measures, there was no news
about famines breaking out, even in the regions where the existing conflicts
are rife.
In short, the global community as a whole, managed
to mitigate the impact of the pandemic, although strategies are far from
perfect.
In this context, OPEC+ has a responsibility to look
after its interest while not taking any measure that could potentially harm the
global economy – and the nations of the OPEC+ too, ultimately.
