Alex Lawler

LONDON, (Reuters) – OPEC has reduced its forecast of world oil demand for the fourth quarter of 2021 due to high prices. However, the group maintained its prediction that there would be robust growth in the next three years to exceed pre-pandemic levels.

The Organization of the Petroleum Exporting Countries released a monthly update that also included a forecast of supply coming from U.S. Shale producers in the next year. It is a possible headwind to the effort of the organization and its allies for market balance.

OPEC forecasts that oil demand will average 99.49 millions barrels per daily (bpd), down 330,000 bpd over the last month’s prediction. The forecast of year-end demand growth has been lowered by 160,000 barrels per day to 5.65 million barrels/day.

In the report, OPEC noted that a slower pace of recovery was now expected in the fourth quarter 2021 due to rising energy prices. OPEC also cited slower-than-expected demand from China and India as reasons for its downward revision.

Trading houses, government agencies and companies are monitoring closely the recovery of oil demand from last year’s crash.

These changes have meant that world consumption will surpass 100 million bpd in the third quarter 2022, according to OPEC. This is three months earlier than was forecasted last month.

As OPEC+ and its allies gradually increase oil supplies and demand recovers after the pandemic, this year’s oil prices rose to a record high of $86 per barrel. Prices for coal have also shot up.

OPEC said that it anticipates world oil demand to grow by 4.15 million bpd in 2019, unchanged from the month before. This will increase world consumption beyond 2019.