BAKU, Azerbaijan, June 9
By Leman Zeynalova - Trend:
Oil demand will not regain its pre-pandemic level until next year, Trend reports with reference to the World Bank.
“Commodity prices have seen a sharp rise in 2021, with many now well above their pre-pandemic levels. Oil prices have rallied markedly, averaging $60/bbl in 2021 so far. Prices have been supported by a gradual firming in demand and continued production restraint among OPEC+, even if the group is gradually reducing the extent of its production cuts as the market recovers. However, the pickup in oil prices has been partly dampened by uncertainty regarding the evolution of the pandemic and its potential impact on future oil demand,” reads the latest WB report.
The World Bank says oil prices are projected to average $62/bbl in 2021 and 2022.
“Oil demand is expected to continue to firm in the second half of 2021 but will not regain its pre-pandemic level until next year, with the shortfall mainly due to subdued jet fuel consumption. A key risk to the forecast is the speed at which OPEC+ increases production—the group currently has spare production capacity of up to 9 million barrels per day, equivalent to 9 percent of global consumption in 2019.
A further increase in drilling activity among U.S. shale oil producers is also a potential risk to the oil price forecast. In the longer term, the outlook for oil and other energy commodities will be dependent on the pace of transition toward renewable energy sources,” reads the report.
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