The International Energy Agency (IEA) has released its crude-oil outlook that indicates recovery of the oil industry by the end of next year, as markets face a slow recovery led by renewed tension on demand.
The global agency, in a report, predicted that the demand for oil is going to be low for longer period than anticipated. Amid the COVID-19 outbreak and the following second wave of lockdowns, it cut forecasts for world oil consumption. The market stays shaky, cautioned IEA.
The agency slashed forecasts for global oil demand growth in 2021 by 110,000 barrels a day led by continued strain on jet fuel and kerosene. However, it projects a significant jump of 5.7 million a day, or nearly two-thirds of the volume lost this year.
The agency projected an average consumption of 96.9 million barrels a day in 2021. Procurements of gasoline and diesel will be “particularly robust,” returning to about 99 per cent of pre-COVID-19 levels. Moreover, as the world economy revives gradually and the Organization of Petroleum Exporting Countries (OPEC) and its allies keep a tight stance on production, the IEA believes that inflated crude inventories will decrease in the coming year.
In addition to resurgence in demand, the world oil market is also rebounding due to the initiatives of the OPEC+, a group of crude-oil manufactures headed by Saudi Arabia and Russia.