The International Energy Agency released it’s November Oil Market Report Tuesday making no adjustments to its 2021 global oil demand outlook. The IEA projected unchanged worldwide oil consumption, to rise by 5.5 million barrels per day (bpd) this year. They project expected demand weakness stemming from COVID-19 spreads across Europe would be offset by rising gasoline and jet fuel consumption from the reopening of international air travel.
IEA November Highlights
- Global supplies “leapt” by 1.4 million barrels per day (mbd) in October as production rebounded from Hurricane Ida, and another 1.5 mbd is expected over November and December, IEA said. The U.S. is providing the biggest supply boost.
- IEA has raised its U.S. production outlook for the balance of this year and 2022 “as current prices provide a strong incentive to boost activity even as operators stick to capital discipline pledges.”
- It sees the U.S. returning to pre-COVID production levels by the end of 2022.
- In 2022 the agency estimates demand growth of 3.4 million bpd.
“Global oil demand is strengthening due to robust gasoline consumption and increasing international travel as more countries re-open their borders. However, new COVID-19 waves in Europe, weaker industrial activity and higher oil prices will temper gains,” said IEA.
A number of European countries have brought back targeted lockdowns in an attempt to slow the spread of the COVID-19 virus ahead of the winter months. Netherlands, Austria, and Russia all announced “stay-at-home” orders for the unvaccinated and limited hours of operations for contact sensitive businesses.
Last week in contrast to the IEA outlook, the Organization of the Petroleum Exporting (OPEC+) downgraded global demand expectations for the fourth quarter by 330,000 bpd, projecting annualized growth of 96.7 million bpd. They said that there is no shortage of global oil amid rapidly weakening consumption in China and India.
At the meeting OPEC and Russia-led non-OPEC oil producers agreed to increase production quotas by 400,000 bpd for December, consistent with their July agreement, shrugging off intense lobbying from the United States for more volume of crude oil output.
At the annual energy conference at Abu Dhabi, Saudi oil minister Prince Abdul-Aziz bin Salman rejected calls for additional supplies from the kingdom, adding that “the issue is not lack of crude-oil, but it is a case for availability of gas, liquefied natural gas, coal and the electricity.”
Source: IEA, TC, OPEC
From The TradersCommunity US News Desk