On Tuesday, the International Energy Agency (IEA) said that vaccine rollouts would likely unleash the pent-up oil demand after the pandemic restrictions.
In its monthly oil report, the agency elaborated that as the coronavirus cases abate, oil demand is expected to rebound by a steep 1.6 million bpd in October. It would likely grow until 2022.
Still, the IEA trimmed its forecast for demand growth for the year overall by 105,000 bpd. For the fourth quarter, the prediction was also cut slightly from its estimate last month. Meanwhile, the 2022 estimate was raised by 85,000 bpd.
Regarding the impact of the recent Hurricane Ida in the US, the agency estimated that the potential supply losses from the storm approach 30 million barrels, the first decline in global supply in five months.
However, the IEA added, the global oil market will start approaching balance in October as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) carry out planned supply increases.
