Oil demand growth to slow in 2022-23 as base effects from pandemic recovery taper off

Oil&Gas Materials 3 June 2021 13:38 (UTC +04:00)
Oil demand growth to slow in 2022-23 as base effects from pandemic recovery taper off

BAKU, Azerbaijan, June 3

By Leman Zeynalova – Trend:

In 2022 and 2023 global oil demand growth will slow as base effects from the initial pandemic recovery taper off, although more significant demand recoveries in many emerging markets may be pushed back to 2022 where vaccines are expected to take longer to be administered to a sufficient portion of the populace, Trend reports with reference to Fitch Solutions.

“Structural trends towards rising fuel efficiency, wider transport electrification and a switch to alternative energies, particularly in developed markets, will increasingly erode demand. These trends may be further exacerbated by the after-effects of Covid-19, including an increase in remote working, greater reliance on e-commerce and a reduction in international travel. This supports our forecast for price levels in 2022 and 2023 to trend lower than 2021,” reads the report released by the company.

The report shows that the overall global crude demand picture in 2021 appears to be improving compared to 2020’s extreme pandemic lows as economic recoveries and vaccinations make gradual headway.

“Monthly global fuel demand suggests global consumption may have turned a corner in March 2021, having shifted into growth territory for the first time since the onset of the pandemic in 2020. Although there continues to be a divergence between the US and China and the rest of the world as many markets remain below their pre-Covid-19 fuel consumption levels.

The US and China are driving the global crude demand rebound. Oil demand in China has stabilized rather quickly since the peak of the pandemic passed in April 2020. Even as diesel and jet fuel demands remain some way off from previous pre-Covid-19 levels, Chinese demand has rebounded in full with consumption levels aided by strong recoveries in gasoline, LPG and petrochemical products, rising by 6% year on year in 2020 and up 2 percent through the first two months of 2021,” said the company.


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