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Oil price rises as OPEC foresees a surge in demand growth

There has been an increase in global oil price fueled by a surge in demand for oil.

Oil price rises as OPEC foresees a surge in demand growth

The Organization of Petroleum Exporting Countries (OPEC) in its statement to the International Monetary and Financial Committee meeting of ministers and governors for April 2022, OPEC stated that oil prices had been on the rise, particularly in March this year.

Figures from the organization showed that Brent moved up by $0.77 or 0.72 percent to $107.57/barrel.

According to the organization, the geopolitical tension in Eastern Europe plays a major role in the rise of oil prices adding that it might lead to a large shortage in oil supply.

ICE Brent had an $18 increase from its value in the fourth quarter of 2021 to a near 98$/barrel in the first quarter of 2022.

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The organization said, “World oil demand is estimated to have recovered significantly in 2021, rising by 5.7 million barrels/day. In absolute terms, world oil demand is estimated to have reached 96.8 mb/d last year”.

“In 2022, world oil demand growth is expected to continue recovering and to increase by around 3.7 mb/d to average 100.5 mb/d.”

The organization stated that reduction of the impact of the COVID-19 pandemic and better available management techniques, has helped resuscitate the demand for oil, majorly in the transport sector.

Due to the increase in transportation and industrial activities, OPEC hints the petrochemical and transportation sectors would require more oil in 2022.

The organization said that favorable gain in the oil market was due to activities of both OPEC and Non-OPEC producers joining hands to help stabilize the market.

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The meeting of the International Monetary and Financial Committee in October, 2021 was one of such unified efforts geared towards stabilizing the global oil market.

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