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IEA sees oil demand recovery outpacing growth in supply By Reuters

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© Reuters. FILE PHOTO: A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak

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By Noah Browning

LONDON (Reuters) – Demand for oil will exceed the output of top producers due to progress in vaccinating the world against COVID-19, the International Energy Agency (IEA) said on Wednesday.

“The anticipated supply growth through the rest of this year comes nowhere close to matching our forecast for significantly stronger demand beyond the second quarter,” the IEA said in its monthly report, citing increased pumping from OPEC+ countries.

Output from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, the so-called OPEC+ group of producers, already lags demand for its oil by 150,000 barrels per day (bpd) and that is expected to widen to a 2.5 million bpd shortfall by year’s end, the Paris-based watchdog said.

New waves of infections in Brazil and Thailand and even India – the world’s third-largest consumer suffering record-breaking cases – were not enough to derail the trend but could continue to affect the market, it added.

“India’s COVID crisis is a reminder that the outlook for oil demand is mired in uncertainty. Until the pandemic is brought under control, market volatility is likely to persist.”  

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