▪ Oil prices are on the rise as demand for crude oil recovers in 2021, but their volatility is also increasing due to the spread of COVID-19.
▪ Oil demand is expected to recover gradually and return to pre-COVID-19 levels in the second half of 2022.
▪ OPEC+ agreed to continue its output increase (easing of cuts) despite the emergence of the new variant. However, the production plan may change according to future market conditions.
▪ US shale oil output is forecast to increase gradually. However, a short-term output boost is unlikely due to the lag between drilling and production and because shale companies are conservative in their operations.
▪ The US-led oil reserve release can alleviate the short-term supply disruption, but the impact may be limited.
▪ In 2022, prices are expected to stabilize gradually as supplies from OPEC+, and non-OPEC producers increase in the second half of the year while demand continues to recover.