The International Energy Agency (IEA) revised up its global oil demand estimates for next year while keeping projections for this year steady in its monthly oil report on Tuesday.
This year’s oil demand forecast remains unchanged from last month’s report, at 96.1 million barrels per day (bpd), according to the IEA, while estimates for next year have been revised up by 100,000 bpd to 99.4 million bpd.
Compared to the previous year, global oil demand is now expected to rise by 5.2 million bpd this year and by 3.2 million bpd in 2022.
'Despite the weak 3Q21 demand, the latest news on the Covid front is more optimistic, with global cases falling in recent weeks, continued progress in vaccine manufacturing and inoculations, and less restrictive social distancing measures in many countries,' the IEA said.
Therefore, the agency expects global oil demand to rebound with an above-seasonal increase in October of 1.6 million bpd, and to continue growing until the year-end, albeit at a much smaller monthly growth rate.
The IEA projects a demand increase of 250,000 bpd for November and 390,000 bpd for December.
'By the end of 2021, oil consumption will reach 99.1 million bpd, around 4.7 million bpd higher than at the end of 2020, but still 1.1 million bpd lower than at the end of 2019,' the report said.
- Global oil production falls by 540,000 bpd month-on-month
The IEA noted that unplanned production outages have temporarily halted the uptrend in world oil supply that began in March. However, growth is set to resume in October.
In the US, hurricane Ida shut in a steep 1.7 million bpd along the Gulf Coast at the end of August, causing the most severe damage to the region’s oil infrastructure in more than 15 years, according to IEA.
However, the biggest impact on supply will be seen in September, it stressed.
'In addition, fires at oil facilities in Mexico and Russia and operational issues in Nigeria and Libya during August forced a combined loss of 600,000 bpd that, together with hefty Kazakh maintenance, far offset higher flows from major Middle East OPEC+ nations. As a result, global oil production fell 540,000 bpd month-on-month in August to 96.1 million bpd, still up 4.6 million bpd on the previous year,' the report said.
The IEA stressed that from August, OPEC+ began to target a monthly 400,000 bpd increase in crude oil to phase out the remainder of its historic cut, and those outside the bloc are expected to pump more.
In the event, the total oil supply from OPEC+ fell 300,000 bpd month on month in August, while non-OPEC+ output declined by 240,000 bpd.
By Ebru Sengul Cevrioglu