Oil and gas stocks sizzled today, thanks to a surprise forecast from the Organization of Petroleum Exporting Countries (OPEC). Some of the lesser-known stocks surged the most on Sept. 13, with the following leading the pack as of 2 p.m. EDT.
Centennial Resource Development (NASDAQ:CDEV): Up 6.6%. Vermilion Energy (NYSE:VET): Up 11.2%. Helix Energy Solutions (NYSE:HLX) Up 12.9%. Tellurian (NASDAQ:TELL): Up 14.2%. Comstock Resources (NYSE:CRK): Up 10.5%.
All eyes were on OPEC’s monthly oil market report, scheduled for Sept. 13, to gauge where demand for oil could be headed. Here are the key highlights from OPEC’s report:
Global oil demand in Q3 remained resilient. Oil demand in Q4 could fall, clouded by rising delta-variant COVID-19 cases. Oil demand in 2021 is estimated to be 96.7 million barrels per day (BPD), up slightly from OPEC’s previous outlook of 96.6 million BPD. 2022 will mark the recovery for the oil industry. Oil demand is projected to grow by 4.2 million BPD in 2022, up a whopping 900,000 BPD from OPEC’s August forecast. Oil demand in 2022 could average 100.8 million BPD, exceeding pre-pandemic levels.
The last takeaway is the most important and what primarily sent oil stocks soaring today, as until last week, industry experts expected OPEC to cut its 2022 oil demand forecast in the wake of rising COVID-19 cases.
OPEC’s strong demand forecast comes amid tight oil supply as a significant portion of oil production in the Gulf of Mexico remains offline nearly two weeks after Hurricane Ida. With Tropical Storm Nicholas now heading toward the Texas oil hub, fears of further disruption in oil supply loom large.