IEA cuts global oil demand growth forecast for 2021

crude oil barrels

The International Energy Agency (IEA) lowered its oil demand outlook in light of the ongoing COVID-19 challenges.

The France-based agency said in its monthly report issued today, Feb. 11, 2021, that global crude demand will rise by 5.4 million barrels per day (bpd) to 96.4 million bpd in 2021, recovering around 60% of the volume lost to the pandemic in 2020.

On the other hand, global oil supply rose 590,000 bpd in January, to 93.6 million bpd, as OPEC+ cuts eased. The outlook is improving for countries outside the OPEC+ alliance, with an 830,000 bpd gain expected this year against a 2020 loss of 1.3 million bpd.

The agency noted that the rebalancing of the oil market remains fragile in the early part of 2021 as measures to contain the spread of Covid-19, with its more contagious variants, weigh heavily on the near-term recovery in global oil demand.

Nevertheless, fresh support has been provided by a more positive economic outlook for the second half of the year, along with a pledge from OPEC+ to hasten the drawdown of surplus oil inventories.

In December, OECD industry stocks fell for the fifth consecutive month, recording a monthly decline of 44.6 million barrels to 3.063 billion barrels, 138.3 million barrels above their five-year average.