IEA revises oil demand outlook down by around 100,000 bpd for 2022
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On Tuesday, April 27, 20,21, a tanker truck passes oil well pump-jacks owned by Chevron Corp. at San Ardo in California.
Getty Images| Bloomberg | Getty Images
The International Energy Agency announced Tuesday that oil demand is expected to fall below expectations next year. It revised its outlook for the rest of the year by 100,000 barrels per hour and for 2022.
According to the IEA, global oil consumption is now forecast to grow by 5.4million barrels per hour in 2021 and 3.3million barrels each day in 2022. This will allow for the IEA to achieve pre-pandemic level of 99.5 million barrels a day worldwide.
Reports indicate that the surge in Covid-19-related cases will have a significant impact on recovery. This could lead to jet fuel being severely affected. The report’s authors pointed out that international travel restrictions have been reformed by the introduction of the new variant of the micron omicron.
The IEA said that, while new Covid case growth was anticipated to slow down demand, recovery already in progress was not likely to be slowed.
Demand to exceed production
Despite all this uncertainty production will outpace demand starting in December. This is due to increased output by the U.S., OPEC+ and other countries. According to the IEA, this trend of upwards would continue through 2022 as the U.S.A, Canada, Brazil will pump at the highest level ever.
The IEA stated that Russia and Saudi Arabia could set new records if the OPEC+ cuts remain untuned. Global supply could soar to 6.4 million barrels per day next year, versus a rise of 1.5 billion barrels/day in 2021.
The outlook of the IEA regarding oil prices has also been revised down.
The report’s authors stated that the oil price assumption, based on the forward-curve curve, is approximately 15% lower than the last month’s report.BrentAverage prices are $70.80/bbl 2021, $67.60/bbl 2022
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