Oil demand to hit 100.6m bpd by end-2022, IEA urges OPEC+ to 'open taps'
London (Quantum Commodity Intelligence) - Global oil demand is set to return to pre-pandemic levels by the end of 2022, said the International Energy Agency (IEA) Friday, while keeping its 2021 demand growth forecast at 5.4 million barrels per day.
Following a record decline of 8.6 million bpd in 2020, the IEA said global oil demand is forecast to rebound by 5.4 million bpd in 2021 and a further 3.1 million bpd next year.
By end-2022, demand should surpass pre-Covid levels.
"Our first detailed look at 2022 balances confirms earlier expectations that OPEC+ needs to open the taps to keep the world oil markets adequately supplied," the IEA said in its latest monthly oil report.
"Global oil demand will continue to recover and, in the absence of further policy changes, by end-2022 reach 100.6 million bpd," it added.
However, the report cautioned that the recovery will be uneven not only among regions, but across sectors and products, noting the aviation sector will be the slowest to recover.
"While the end of the pandemic is in sight in advanced economies, slow vaccine distribution could still jeopardise the recovery in non-OECD countries."
Gasoline demand is also expected to lag behind the broader demand recovery due to remote working practices and the increasing market share of electric vehicles.
The report said OECD industry stocks held relatively steady in April, at 2,926 million barrels, but fell 1.6 million barrels below the pre-Covid 2015-19 average for the first time in more than a year.
Inventories
May preliminary data for the US, Europe and Japan show that industry stocks rose by a combined 17.2 million barrels.
Crude oil held in short-term floating storage declined by 6.8 million barrels to 99.4 million barrels in May, its lowest since February 2020.
Meanwhile, non-OPEC+ production is set to rise, but the IEA said the gains are "nowhere near the levels needed" to prevent further stock draws.
In April, OECD total industry stocks fell 61.3 million/b below their 2016-2020 average.
The forecast also highlights the challenges outlined in the IEA's recently released Net Zero by 2050 - A Roadmap for the Global Energy Sector.
"This roadmap notes that most pledges by countries are not yet underpinned by near-term policies and measures. In the meantime, oil demand looks set to continue to rise, underlining the enormous effort required to get on track to reach stated ambitions."
