Global oil demand is forecast to increase 3.1% next year to an average of 99.5 million barrels per day (bpd) on the back of more economic activity and expectations that the expansion of vaccination campaigns will prevent a resurgence of Covid-19 cases, the International Energy Agency (IEA) said in its monthly oil report on Tuesday.
The agency said the outlook for the global economy remains on track to steadily improve for the remainder of the year and into 2022.
However, it warned that the escalating Covid-19 cases in a number of countries remain a key downside risk to the forecast.
“In Europe, the recent lifting of some Covid restrictions has had a positive effect on the economy. Pent-up demand, the re-opening of hotels and restaurants, and large household savings should contribute to a strong rebound in economic activity during the summer,” the agency added.
The energy agency voiced expectations for stronger global oil demand in the second half of the year, recording a 4.6 million bpd rise compared to the first half of 2021. This is a combined result of robust global economic growth, rising vaccination rates, steadily increasing mobility levels, and the easing of social distancing measures, it added.
In 2022, the highest consumption is forecast to be in the Asia Pacific region with 37.2 million barrels per day, followed by the Americas with 31.2 million barrels and Europe with 14 million barrels.
- Global supply rises
The IEA said global oil supply increased by 1.1 million bpd in June to 95.6 million bpd, as OPEC+ eased output cuts and producers outside the alliance ramped up output after maintenance.
The agency said demand growth is stronger than the world oil supply growth with OPEC+ yet to fill a large supply gap for the remainder of this year, as stocks are registering below their five-year average.
However, with Saudi Arabia phasing out its voluntary cut along with the group's overall May-July increase, more oil is on the way this month, it said.
OPEC crude oil production reached 25.93 million bpd in June, recording an increase of 450,000 bpd compared to the previous month.
Non-OPEC production also saw an increase of almost 650,000 bpd to 64.34 million bpd.
By Sibel Morrow