Global oil demand to recover to pre-pandemic levels, says IEA

Bloomberg

Global oil demand will recover to pre-pandemic levels late next year, the International Energy Agency (IEA) predicted, urging Opec and its allies to keep markets balanced by tapping their plentiful spare production
capacity.
World consumption will once again reach 100 million barrels a day in the second half of 2022 as developed economies bring the virus under control, the agency said, in its first detailed outlook for the year ahead. At some point before the end of
the year, demand will surpass pre-Covid levels, it said.
The forecast counters speculation that oil use — and the
resulting planet-warming emissions — may have already peaked as a result of social changes in the wake of the pandemic. The IEA itself sees consumption reaching a plateau in the 2030s, but hasn’t predicted a peak in demand.
Oil prices have rebounded to a two-year high above $70 a barrel as motorists take to the roads and economic activity picks up with the easing of lockdowns.
IEA Executive Director Fatih Birol has warned of a further price surge if extra supplies aren’t forthcoming. However, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman has said he’ll wait until consumption is tangible before responding.
Non-Opec+ supply will rebound by 1.6 million barrels a day in 2022, satisfying half of the anticipated 3.1 million-barrel jump in demand. Demand for Opec’s crude will be slightly lower by the end of next year than the fourth quarter of this year, at just under 29 million barrels a day.
While demand for gasoline and diesel fuels will jump next year, it will still be about 1% short of pre-Covid levels due to the growth of remote working and popularity of electric vehicles, the IEA said. Purchases of jet fuel will also surge, yet remain 11% below prior levels because of limits on air travel.
And with countries outside the developed world still battered by new waves of the virus, the recovery may also prove patchy on a regional basis.
“While the end of the pandemic is in sight in advanced economies, slow vaccine distribution could still jeopardise the recovery in non-OECD countries,” the IEA said.