Oil supply will surpass demand- IEA

An increase in the new Covid cases is expected to slow the recovery in global oil demand, with air travel and jet fuel most affected, said the International Energy Agency (IEA) in its monthly report.

“On average, oil demand has been revised down by around 100 kb/d since last month’s Report for both 2021 and 2022. Global oil demand is now set to rise by 5.4 mb/d in 2021 and by 3.3 mb/d in 2022, when it returns to pre-pandemic levels at 99.5 mb/d,” said IEA in a statement.

Led by the US and the OPEC+ alliance, the oil production is expected to outpace demand from December, globally.

The agency said that the US, Canada and Brazil look to pump at their highest ever annual levels, lifting overall non-OPEC+ output by 1.8 mb/d in 2022. 

Saudi Arabia and Russia could also hit records if remaining OPEC+ cuts are fully unwound, the agency said. In that case, global supply would soar by 6.4 mb/d next year compared with a 1.5 mb/d rise in 2021.

"The surge in new COVID-19 cases is expected to temporarily slow, but not upend, the recovery in oil demand that is underway," IEA said in its monthly oil report.