By Noah Browning
LONDON, (Reuters) – A global energy crisis is likely to increase oil demand by half a billion barrels per daily (bpd), which could stoke inflation. It also may slow down the recovery of the COVID-19 pandemic.
The Paris-based agency reported that “record prices for coal and natural gas, as well rolling blackouts, are prompting power sector and other energy-intensive industries turn to oil to maintain lights and operations going,” in its monthly oil report.
Higher energy prices also contribute to inflationary pressures. These, combined with power outages can lead to lower industrial activity as well as a slower economic recovery.
It also stated that the world’s oil consumption is projected to rebound to pre-pandemic levels in 2019.
According to the IEA, producer GROUP OPEC+ will pump 700,000. bpd less than the demand in the fourth quarter. This means that demand for crude oil is expected to outpace supply until at least 2021.
It said that the past quarter saw the largest draw in oil product stocks in eight year, while the storage levels in OECD country were at their lowest level since 2015.
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