NEW YORK : Whether fuel pump prices fall in 2022 depends on two groups of producers who are struggling to increase oil output in the wake of the pandemic: OPEC and its allies and U.S. shale firms.
The International Energy Agency expects the roughly 100 million barrels per day market to flip into surplus in the first quarter next year, and for supply to outpace demand by 1.1 million bpd, taking some heat out of prices. That oversupply could rise to 2.2 million bpd in the second quarter, the energy watchdog forecasts.
Commodities trading giant Trafigura warned on Tuesday of a"very, very tight oil market" as declining production investment, partly due to an industry transition to greener energy, adds to price pressure. The IEA expects a massive 480,000 bpd rise in U.S. crude and natural gas liquids output in the second quarter of 2022, and by 1.1 million bpd for all of 2022.
Shale companies are grappling with labor and equipment shortages, while others say demand is still too uncertain to boost output as the industry recovers from the pandemic-induced recession.
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