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Oil demand to be over 100 million b/d again by late 2022

Oil&Gas Materials 15 January 2021 15:31
Oil demand to be over 100 million b/d again by late 2022

BAKU, Azerbaijan, Jan.15

By Leman Zeynalova – Trend:

Oil demand is expected to be over 100 million b/d again by late 2022, Trend reports citing Wood Mackenzie.

“We think there’s a risk of a significant tightening in the supply and demand balance which will lift Brent above US$70/bbl by mid-decade,” the company said.

“Demand will continue to recover strongly through 2021. The bounce from the April low has been spectacular, global demand already up 15 million b/d. Asia, one-third of global demand, is almost back to the Q4 2019 peak. Demand in North America and Europe has also jumped, though both are still well below 2019 Q4 levels.

Rising Covid-19 cases and new, strict lockdowns in the UK and parts of Europe have led us to lower our forecast for global demand in 2021 by 0.4 million b/d in our early January update. But the roll-out of an effective vaccine program, now underway, boosts our confidence that we’ll see a resurgence in global economic growth this year (GDP growth up 4.6 percent), which is bullish for oil. We expect global demand to increase another 6.3 million b/d, and to reach just under 99 million b/d by year end, 1 million b/d below the Q4 2019 peak,” Wood Mackenzie said.

Second, active management of supply remains critical in the short run to drive down stubbornly high inventories, the company believes.

“Last April’s OPEC+ agreement to cut 9.7 million b/d of production helped stabilize the market and, just as importantly, sent a strong message of intent. Saudi Arabia’s decision at the 5 January OPEC+ meeting to cut another 1 million b/d of its own output for two months highlights its determination to hold OPEC+ together and get the market back on an even keel.”

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Follow the author on Twitter: @Lyaman_Zeyn

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