The Strategist

IEA expects rise in global oil demand

11/17/2021 - 06:11

The International Energy Agency (IEA) has barely changed its forecasts for global oil demand in 2021-2022: it still expects it to grow by 5.5 million bpd this year and has raised its 2022 forecast by 0.1 million bpd to 3.4 million bpd, according to a November report from the agency.

"Global oil demand is rising due to strong gasoline consumption and increased international travel as more countries break away from their borders. However, new waves of COVID in Europe, weakening industrial activity and high oil prices, will constrain demand growth, leaving our forecast for oil demand growth almost unchanged from last month's report at 5.5 million bpd in 2021 and 3.4 million bpd in 2022," the report said.

The November forecast put global oil demand at 96.28 million bpd in 2021, up from 90.79 million in 2020.

The IEA also raised its forecast for oil production growth in 2021 by non-OPEC+ alliance countries, now expecting it to be 480,000 bpd.

In the October report, the figure was forecast at 390,000 bpd.

"Compared to our previous report, non-OPEC+ production in the fourth quarter of 2021 has been revised upward by 240 thousand bpd to 47.4 million bpd and by 170 thousand bpd in 2022, raising the projected annual production to 480 thousand bpd in 2021 and to 1.9 million bpd next year," the report said.

The agency adds that the increase in the forecast was driven by a faster-than-expected recovery in US offshore production and a sustained increase in shale drilling activity amid higher oil prices.