Global oil demand is set to increase by 6.2% in 2021, or 5.7 million barrels per day (bpd), to an average of 96.9 million bpd, according to the International Energy Agency's (IEA) monthly oil report on Tuesday.
Despite the launch of vaccination campaigns in several countries and the expected wide availability of vaccines, expectations have been raised that global economic activity will return relatively rapidly to normal in most regions, but the IEA said: “it will not be the case for oil demand.”
“It will be several months before we reach a critical mass of vaccinated, economically active people and thus see an impact on oil demand,” the agency said.
According to the IEA, global demand in 2020 will be 8.8 million bpd lower than last year, recording an 8.8% decrease down to 91.2 million bpd.
-Global oil output to increase next year
With the US rebound from hurricane shut-ins and the rapid build-up in Libya’s output, the IEA said global oil supply rose in November by 92.7 million bpd, the highest since May.
“Libya’s rebound, if sustained, is likely to help boost fourth-quarter 2020 oil output by 1.2 million bpd and contribute to an overall increase of 1.8 million bpd in the first three months of next year, assuming OPEC+ nations lift their supply target by 0.5 million bpd each month.”
The EIA said that output is expected to be higher in December before OPEC+ production ramps up at the start of 2021, however, the rate is still 9.2 million bpd lower than 2019.
Apart from the United Arab Emirates (UAE), which saw an 80,000 bpd increase month-on-month, production from countries participating in the OPEC+ agreement held largely steady in November with 101% overall compliance to the oil cut pact.
Crude oil production of OPEC countries reached 25.02 million bpd in November with an increase of 73,000 bpd compared to the previous month.
Non-OPEC production saw an increase of 200,000 bpd to 62.49 million bpd.
By Sibel Morrow