Oil Demand Will Set Record in 2022

This week crude prices reached levels we have not seen since 2018 and they are expected to be record setting in 2022.

According to the Midland Reporter-Telegram, West Texas Intermediate posted three days of gains on the New York Mercantile Exchange.

“There are a lot of things going on the oil market, as usual,” Economist Ray Perryman told the MRT. “The biggest thing is simply that economies are opening and demand is rising. We are relatively close to pre-pandemic consumption levels. The world was using about 101 million barrels per day early last year. There were a few days in April of 2020 when it was in the low 70s. Demand is now approaching 97 million barrels and will likely set a new record next year. In addition, the OPEC+ group is continuing to exercise reasonable discipline in their response to rising demand. Other factors, such as the decision regarding drilling in Alaska have some effect, but that is more of a long-term factor.”

XRI, a water management and water midstream company, is seeing a lot of increase in demand recently.

“XRI is certainly seeing an uptick in demand for our water midstream services and this trend actually started during the latter part of the fourth quarter of 2020 and has continued as drilling and rig counts have increased in 2021,” said John Durand, XRI President and Chief Sustainability Officer. “In particular, we have seen transformational growth in the produced water reuse and recycling segment of our business.”

Durand also said that his company is providing water management solutions with a focus on being environmentally responsible.

Recovery of the demand has been helped by renewed interest by commodity index investors looking to hedge inflation in their portfolios.