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Next year, global oil demand will reach pre-virus levels, the IEA said.

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The International Energy Agency predicted that global oil demand would recover to pre-pandemic levels later next year and urged OPEC and its allies to leverage their abundant reserve capacity to balance the market.

Global consumption will reach 100 million barrels a day again in late 2022 as developed countries control the virus, the agency said. By the end of the year, demand would exceed pre-COVID levels, he said.

This prediction goes against speculation that oil use and consequent global warming emissions may have already peaked as a result of post-pandemic social change. The IEA itself expects consumption to reach a plateau in the 2030s, but does not anticipate peak demand.

Crude oil prices bounced back to over $ 70 a barrel for the first time in two years as drivers went out on the road and economic activity recovered with the easing of the blockade. The report, which depicts a slightly more bullish situation than the authorities’ previous outlook, emphasizes that the next move in the market is in the hands of Russia and Saudi Arabia.

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The Paris-based IEA has directly urged the two-led OPEC + alliance to continue recovering production cuts when demand collapsed last year.

“OPEC + needs to open the faucet to keep the global oil market in good supply,” said an agency that advises most major economies. Satisfying demand growth is “less likely to be a problem” if a coalition of 23 countries acts, as only one-fifth of the surplus capacity is needed to balance the market. ..

IEA Executive Director Fatih Birol warned of further price spikes if no additional supplies were planned. However, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said he would wait until consumption became concrete before responding.

Achieved goal

The report shows that OPEC and its partners have eliminated the huge overstocking accumulated during the pandemic and have already achieved key market goals. In April, developed country stockpiles fell below OPEC’s key indicator for the period 2015-2019, according to the report.

According to the IEA, the next step in the group should be easy.

The IEA estimates that OPEC + should add about 1.4 million barrels per day. This is less if fellow Iran has signed a contract to remove US sanctions. According to Bloomberg calculations, the buffer is not very generous.

The IEA estimates that Tehran could add 1.4 million barrels of exports if it signs a nuclear deal with Washington that removes the US barrier to oil trade. This corresponds to the amount OPEC + the entire coalition needs to add. The group will meet on 1 July to consider the next move.

The alliance made the job easier, perhaps unintentionally. Last year, the group encouraged investment by US shale thrillers and other rivals with significant production cuts and price support, the report said.

Non-OPEC + supply will increase by 1.6 million barrels per day in 2022, meeting half of the expected increase in demand of 3.1 million barrels. By the end of next year, OPEC’s crude oil demand will be slightly less than in the fourth quarter of this year, to just under 29 million barrels per day.

Even if OPEC + increases production enough to meet growing demand, 2022 production will fall below 2019 levels by 2 million barrels a day.

For the full year, global oil consumption will be just below next year’s 2019 levels, remaining at 99.5 million barrels per day. The recovery of consumption will also be uneven.

Demand for gasoline and diesel fuel will skyrocket next year, but the growth of telecommuting and the popularity of electric vehicles will be about 1% below pre-COVID levels, the IEA said. Jet fuel purchases are also skyrocketing, but due to air travel restrictions, they are 11% below previous levels.

And countries other than developed countries are still being hit by a new wave of viruses, and recovery may prove to be mottled on a regional basis.

“The end of the pandemic is visible in developed countries, but slow vaccine distribution can jeopardize the recovery of non-OECD countries,” the IEA said.

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Next year, global oil demand will reach pre-virus levels, the IEA said. Next year, global oil demand will reach pre-virus levels, the IEA said.

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