Global oil demand to surge in 2022 as economy rebounds: EIA

London (Quantum Commodity Intelligence) - Global oil demand will surge to 101.3 million barrels per day (b/d) in 2022, recovering almost all the losses from Covid-19, the Energy Information Administration (EIA) said in its April short term energy outlook.

The figure is an improvement on its previous estimate to reflect higher global GDP forecast by Oxford Economics.

After reaching 96 million b/d in March, the EIA predicts demand will average 97.7 million b/d this year, up 5.5 million b/d from 2020.

Year-on-year growth will then slow to 3.7 million b/d next year, and fall just shy of the 101.5 million b/d seen in 2019.

"The higher forecast is primarily a result of higher global GDP growth forecasts from Oxford Economics, which increased 0.4 percentage points from the March STEO to 6.2% for 2021," the EIA stated, although added its outlook remains very precarious because responses to Covid-19 continue to evolve.

Yesterday, the International Monetary Fund also improved its outlook, with the global economy expected to grow by 6% in 2021 and by 4.4% in 2022, up 0.8% and 0.2% respectively from October 2020.

The EIA expects global oil stocks to fall 1.8 million b/d in the first half of 2021, and the world oil market will be largely balanced in the second half of the year if current demand and supply forecasts hold.

The shifting balance will see Brent drop from an average of $65/bbl in the second quarter of this year down to $61/bbl in the second half of 2021, and then $60/bbl in 2022.

OPEC production should rise from an average of 25.1 million b/d in the first quarter of 2021 to 25.8 million b/d in the second quarter following the April 1 announcement by OPEC and its allies.

In the second half of this year, OPEC production will average 27.9 million b/d.

U.S. crude production will average 10.9 million b/d in the second quarter, rise to 11.4 million b/d by fourth quarter, and rise further to average 11.9 million b/d in 2022 if WTI crude oil prices hold above $55/bbl, according to the EIA.