OPEC is betting against Omicron.
The alliance of oil exporting countries raised its forecast for global demand in the first quarter of 2022 by 1.1 million barrels a day, Bloomberg News reported.
“The impact of the new Omicron variant is projected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges,” a monthly report from OPEC's research department said, according to Bloomberg.
The decision to raise the projection was considered a gesture of goodwill from Saudi Arabia to the United States, Bloomberg News reported. The 1.1 million barrels a day increase in the daily projection equals normal growth before the COVID-19 pandemic, the report stated.
So far, oil prices have largely held steady as the omicron variant sweeps the globe.
Although the report raised projection for demand in the first quarter, it lowered them for the second and third quarters, keeping the projected growth of 4.2 million barrels a day the same for 2022, Bloomberg reported.
According to the report, OPEC will need 27.89 million barrels a day in the first quarter, and its current production is 27.7 million barrels. However, previously planned supply increases could put production over demand, increasing inventories worldwide. OPEC pointed out, however, that global oil inventories have been depleted during the pandemic and restoring them to normal levels could absorb part of any oversupply.
The omicron variant is still a "very high" global risk, the World Health Organization said, in a Reuters report. However, there are "considerable uncertainties" about its severity, particularly with limited data yet to be analyzed.
World oil consumption could top 100 million barrels per day in the third quarter of 2022, a level last reached in 2019, Reuters reported.