The International Energy Agency said oil demand in 2020 is improving from the greatest drop in its history. However, the world will not return to pre-pandemic demand levels before 2022 due to less flying caused by coronavirus fears.
The Agency’s first forecast shows demand to grow by 5.7 million bpd for 2021, which will be 2.4 million bpd below the level in 2019. Air travel in the middle of May started to rise slightly, the IEA said. As economic lockdowns aimed at containing the virus were eased, flying accelerated in June, but was still down by over 70 percent from 2019 levels.
The IEA’s forecast for 2020 oil demand raised by nearly 500,000 bpd, triggered by Asia’s stronger than expected imports. The OPEC+ had reduced their output by 9.4 million bpd, the IEA said. A plunge cited by the agency in global oil supply by 11.8 million bpd in May.
Since the start of this year, output was down 4.5 million bpd from countries outside the deal. Unless new shale oil investments encouraged by oil price rises, the US output was set to decline 900,000 bpd this year and another 300,000 barrels next year.
