The Strategist

IEA follows OPEC in improving global oil demand forecast

04/15/2021 - 03:23

The International Energy Agency improved its oil demand forecast, pointing to declining storage capacity, gathering pace of vaccination and a "firmer footing" in the global economy. OPEC also raised its forecast earlier.

The International Energy Agency (IEA) raised its forecast for global oil demand in 2021 by 230,000 bpd from March. It now expects demand to reach 96.7m bpd: an increase of 5.7m bpd from 2020. The IEA's April forecast is published on the agency's website.

One year after the "black April" (what the IEA calls "one of the darkest months in history for global oil markets", when the WTI price plunged to negative levels), fundamentals look is "decisively" better, the report says. Oil storage capacity, which rose because of the pandemic that hit demand, is declining. Vaccination campaigns are picking up the pace. And the global economy appears to be standing on "firmer footing", the agency points out.

However, the recovery in demand remains "fragile" as the number of coronavirus cases increases sharply in some key oil-consuming countries, the IEA stresses. These are countries in Europe, but also, for example, India and Brazil. Oil stocks held by Organisation for Economic Co-operation and Development (OECD) countries were broadly unchanged in March after seven months of decline, the agency said, citing preliminary data.