The International Energy Agency expects global oil demand to return to pre-Corona levels in 2022, but it has lowered demand estimates this year, while Hurricane Ida caused global supply to decline during August for the first time in 5 months.
The agency expects global oil demand to recover in October, after 3 consecutive months of decline as a result of the acceleration of Corona epidemic injuries in Asia.
And the monthly report of the Energy Agency – issued today, Tuesday – showed that estimates of global oil demand in the third quarter of this year were revised down by about 200,000 barrels per day compared to assessments last month.
According to the report, global oil demand is expected to witness a strong recovery of 1.6 million barrels per day during October, and to continue growing until the end of the year.
A number of countries in the world have witnessed the re-imposition of closure restrictions since last July, in order to limit the increase in Corona injuries.
Despite the weaker estimates for the third quarter of this year, the Energy Agency expressed a more optimistic view of the new epidemic injuries; As a result of progress made in the manufacture and distribution of vaccines, as well as the easing of social distancing measures.
And the Energy Agency said: “Already signs are beginning to appear that the frequency of corona infections is declining… Strong pent-up demand and continued progress in vaccination programs should support a strong recovery starting in the fourth quarter of 2021.”
Global demand prospects
The IEA estimates that global oil demand is now expected to grow by 5.2 and 3.2 million barrels per day during the current and next two years, respectively.
This means that the International Agency has reduced its estimates of growth in demand for crude as a whole this year by 105 thousand barrels per day, while it raised the growth estimates for the next year by about 85 thousand barrels per day.
According to estimates by the International Agency, the total global demand for oil on average will be 96.1 and 99.4 million barrels per day in the current and next two years, respectively.
The report comes one day after OPEC raised its estimate of global oil demand growth in 2022, to 4.15 million barrels per day, and a few days after the US Energy Information Administration report, which lowered its growth forecast to 4.96 million barrels per day.
Hurricane Ida displayed
The negative repercussions of Hurricane Ida on the oil center of the American Gulf Coast caused the global supply of oil to decline for the first time in 5 months.
The International Energy Agency estimates potential oil supply losses from the storm – the worst in the Gulf Coast region since Hurricanes Katrina and Rita in 2005 – at nearly 30 million barrels, given the current extended shutdowns.
Production of about 1.7 million barrels per day of oil was halted along the Gulf Coast in late August, as a result of Hurricane Ida, and the process of restarting a number of offshore platforms was delayed.
According to the report, the global supply of oil decreased by 540 thousand barrels per day during last August, to record 96.1 million .
OPEC+ and production
The Energy Agency believes that the oil markets are heading towards achieving a balance between supply and demand starting from next October, with the gradual increase implemented by OPEC + at a monthly pace of 400,000 barrels per day from last August.
Oil production by OPEC+ countries is expected to increase by 2.4 million barrels per day between August and the end of 2021.
Meanwhile, the IEA estimates an increase in oil production from non-OPEC+ countries by about 400,000 barrels per day, according to the monthly report.