OPEC says to continue with supply adjustments for oil market

MILAN: The Organization of the Petroleum Exporting Countries (OPEC) will continue with its supply adjustments for the oil market, the OPEC Secretary General said on Saturday.

"We will continue to do what we know best to ensure we attain stability in the oil market on a sustainable basis," Mohammad Barkindo said in a webinar organised by Italian think-tank ISPI.

Oil prices fell on Thursday after OPEC and its allies stuck to their existing policy of monthly oil output increases despite fears a release from U.S. crude reserves and the new Omicron coronavirus variant would put renewed pressure on prices.

Barkindo said in terms of oil demand the estimate at the moment was for a growth of 5.7 million barrels per day. "In 2022 we expect another 4.2 million," he said.

He said the uncertainty and volatility on the markets was also due to extraneous factors such as the ongoing Covid pandemic and not necessarily the fundamentals of oil and gas.

"Now we are on course of returning the level of consumption in 2022 to pre-COVID levels," he said.

Barkindo said that the forecast was for oil and gas to account for more than

50% of the global energy mix in 2045 or even to mid century.

"In all the pronouncements we had from Glasgow we have not yet seen any concrete road map or plans of how to replace this 50% ... without creating unprecedented turmoil in the energy markets," he said, referring to the Glasgow climate conference.

"Oil and gas will be needed for the foreseeable future."

Brent crude futures settled up 80 cents, or 1.2 percent, at $69.67 a barrel on Friday, while U.S.

West Texas Intermediate (WTI) crude futures rose 93 cents, or 1.4 percent, to $66.50.

The market sold off dramatically after the OPEC+ issued a bit of a surprise by sticking to plans to boost output monthly by 400,000 barrels per day.

It was the latest in a series of events that have caused crude to slump wildly, having lost 24 percent in the last three weeks.

OPEC+ has been adding 400,000 bpd to its target, but falling well short of that on a monthly basis due to underinvestment in several members' oil industries.

The additional supply comes as markets grapple with the lack of clarity on the severity of the Omicron variant of the coronavirus and whether vaccines will remain effective against it.