Inflation, others affecting global oil recovery — Barkindo
By Uthman Salami
The Secretary-General of the Organization of Petroleum community (OPEC), Muhammad Sanusi Barkindo has revealed that Injections, Inflation and investment are major factors bedevilling global oil markets recovery.
Barkindo stated this in his opening address at the 52nd meeting of JTC on Monday.
According to him, “There are many ‘moving parts’ when it comes to factors affecting the global oil market. Such is the pace of change during the pandemic, it can be difficult to synthesise developments.”
He said that the major way out to recover from the pandemic “is through the vaccination rollout,” declaring that “this will contribute to recovery in the global economy and oil demand.”
He added that so far “More than 1.84 billion doses have been administered worldwide, which equates to roughly 24 out of 100 people,” disclosing that there has been massive variations by continent; North America has seen 60 doses per 100 people; whereas Africa has seen only 2.3.”
He revealed that the Eurozone economy is expected to bounce back in the second quarter of this year from the double dip recession owing to the vaccinations of people coupled with reopening of borders
Meanwhile, Barkindo expressed the disparity in the ease of lockdown as some Asian countries are still battling with the deadly pandemic.
In his words, “Many of the country’s major cities remain under lockdown due to intense outbreaks and output fell by 1.3per cent in 1Q21 in Japan.”
He decried the number of people that have been lost globally saying that over 3.5 million men, women and children,” have died.
The secretary also stated his happiness over what he described as “progress of the vaccination campaigns in certain regions” which he said had accounted for “global economic growth forecast for 2021, by 0.1 per cent to reach 5.5per cent y-o-y.
“World oil demand is expected to increase by 6.0 mb/d in 2021, unchanged from last month’s estimate, to average 96.5 mb/d. Non-OPEC liquids production for 2021 is revised down by 0.2 mb/d m-o-m, and is forecast to grow by 0.7 mb/d.”
He explained that inflation is another phenomenon that has led to “labour shortages in some parts of the world, along with supply chain bottlenecks. Central bankers will have a difficult task in balancing their ‘average inflation targeting’ with the loose monetary policy that is designed to help lubricate the post-pandemic recovery.”
He further explained that inflation is “affecting the thinking of monetary policy-makers and investors that It warrants careful further monitoring.”
Barkindo concluded that investments are the bloodline in the oil and gas industry as “75% reduction in global oil demand would have on the development of emerging economic.”
He added that “achieving net zero emissions would be challenging for an economy, including advanced economies. The scenario outlined by the IEA is extremely ambitious and require radical change to daily life as we know it.
“The claim that no new oil and gas investments are needed post 2021 stands in stark contrast with conclusions often expressed in other IEA reports and could be the source of potential instability in oil markets if followed by some investors.
“Given the diverse range of uncertainties, it is a tremendous source of comfort to the market that the ‘Declaration of Cooperation’ partners continue to be such a reliable and dependable component contributing to oil market stability.
“Our carefully considered voluntary adjustments in production, based on the methodical analysis of this Committee, supported by the Secretariat, have been able to moor the ship no matter how tempestuous the waters.
“The results of our endeavours continue to be felt in the drawdown of stocks. OECD commercial oil stocks fell by 6.9 mb m-o-m in April 2021 to stand at 2,962 mb. This was 160 mb lower than the same time one year ago and 34 mb above the 2015-2019 average.”
