Global oil demand is forecast to increase 6% this year, or 5.4 million barrels per day (bpd), to an average of 96.4 million bpd, recovering around 60% of the volume lost to the pandemic in 2020, according to the International Energy Agency's (IEA) monthly oil report on Tuesday.
The agency, however, expressed caution on the first quarter’s oil demand outlook due to the expected impact of the new Covid-19 variants, particularly on mobility.
But the agency said, “a more positive global economic outlook and the start of large-scale vaccination campaigns in much of the developed world will reinforce stronger oil demand growth in the second half of the year.”
Near-term demand weakness will be offset by a robust recovery in manufacturing and stronger economic growth expectations for the US, it added.
In 2021, the highest consumption is forecast to be in the Asia Pacific region with 35.8 million barrels per day, followed by the Americas with 30 million barrels and Europe with 14 million barrels.
-OPEC production increases
The IEA said global oil supply rose by 580,000 bpd in January to 93.6 million bpd, the highest since last April. However, supplies are expected to fall in February as Saudi Arabia implements a sizeable voluntary reduction, although it is still 7.1 million bpd lower compared with the same month of 2019.
“As things currently stand, global oil output could rise by more than 1.6 million bpd in 2021 provided those outside OPEC+ pump more, OPEC+ continues to unwind its record cuts of 2020 and Libya sustains its recovery,” the IEA said.
OPEC crude oil production reached 25.45 million bpd in January, recording an increase of 240,000 bpd compared to the previous month.
Non-OPEC production also saw a rise of 320,000 bpd to 62.94 million bpd.
By Sibel Morrow