The two agencies played down Omicron concerns, but the IEA said the oil market could be oversupplied from this month

On Tuesday (December 14) in the European market, international oil prices once soared and fell, although the two major institutions said that the impact of the Omicron variant may be limited, but the IEA's expectations of oil oversupply within the day put pressure on oil prices again, and Brent crude oil fell by more than 1%
after the release of the IEA monthly report.

OPEC raised its global oil demand forecast for the first quarter of next year, saying that the impact of the Omicron variant was mild and short-lived

On Monday (Dec.
13), the Organization of the Petroleum Exporting Countries (OPEC) raised its global oil demand forecast for the first quarter of 2022 and insisted on a timeline for oil demand to return to pre-pandemic levels, saying that the Omicron variant would only have a mild and short-lived impact
.

OPEC said in its monthly report that it expects global oil demand to average 99.
13 million barrels per day in the first quarter of 2022, up 1.
11 million barrels
from last month's forecast.

"Some of the demand rebound previously expected in the fourth quarter of 2021 has been delayed to the first quarter of 2022, and demand will rebound
more steadily in the second half of 2022," OPEC said in the report.
In addition, as the world becomes better prepared to respond to the pandemic and its associated challenges, the impact of the new Omicron variant is expected to be mild and short-lived
.
”

In its monthly report, OPEC kept its demand growth forecast unchanged for this year and next, saying that global oil demand will increase by 4.
15 million b/d
in 2022.
Global oil demand is expected to exceed 100 million b/d by the third quarter of 2022, in line with
last month's forecast.
According to OPEC data, the last time global oil demand exceeded 100 million b/d was in 2019
.

OPEC supply increased, but OPEC maintained its forecast for U.
S.
shale oil production unchanged

The report also showed that OPEC+ production increased
as it phased out last year's record production cuts.
At its Dec.
2 meeting, OPEC+ agreed to raise monthly output by 400,000 b/d
in January.

OPEC output rose by 290,000 b/d to 27.
72 million b/d in November, mainly driven by production increases
from Saudi Arabia and Iraq, the two largest producers, the report showed.
Meanwhile, Nigeria averaged 1.
27 million b/d of crude oil production in November, regaining the top spot
among African crude producers, according to OPEC's latest monthly report.

Investors are also focused on signs of a sharp rebound in U.
S.
shale oil supply, as higher oil prices spur more investment, which could adversely
affect OPEC+'s efforts to support the market.
But this month, OPEC's forecast for U.
S.
shale production growth in 2022 was largely stable at 600,000 b/d
.
The growth forecast for total supply from non-OPEC countries in 2022 remains unchanged
.

The report shows that OPEC now has room to increase production
further from November.
OPEC said it expects demand for OPEC crude to reach 28.
8 million b/d by 2022, up 200,000 b/d
from last month's forecast.

IEA Monthly Report: Oil supply is about to exceed demand and continue to surge in 2022

On Tuesday (Dec.
14), the International Energy Agency (IEA) said that the surge in coronavirus infections and the emergence of the Omicron variant will suppress global oil demand, but the overall picture is that oil production will exceed demand this month and soar
sharply next year.

In its monthly oil report, the IEA said: "The surge in Covid cases is expected to only temporarily slow rather than stifle the current recovery
in oil demand.
" The impact on the economy of new containment measures to stop the spread of the virus is likely to be more modest
than previous waves of the pandemic.
”

The U.
S.
will be the country with the largest increase in production for the second month in a row, according to the IEA, as drilling activity there is on the rise
.
Next year, Saudi Arabia and Russia could also see record annual production if OPEC+ completely lifts its agreed production restrictions
.
This could result in an average oversupply of 1.
7 million barrels per day in Q1 and Q2 2022, respectively
.
Global oil supply is likely to increase by 6.
4 million b/d next year and 1.
5 million b/d
in 2021.

The IEA cut its oil demand forecast by 100,000 b/d each for this year and next, mainly due to new travel restrictions expected to hit jet fuel use
.
Global oil demand is now expected to increase by 5.
4 million b/d in 2021 and 3.
3 million b/d in 2022, when it will return to pre-pandemic levels of 99.
5 million b/d
, the agency said.

On Tuesday (December 14) in the European market, international oil prices once soared and retreated, giving up intraday gains
.
With the Fed's monetary policy meeting in the spotlight of financial markets, the pre-meeting market tug of war is likely to continue, and investors are waiting for new fundamental news to guide the way
.