IEA Improves Global Oil Demand Projections – The IEA raised its forecast for global oil demand in 2021. The IEA raised its outlook for oil consumption this year by 230,000 bpd to 5.7 million bpd amidst the increasingly robust economic environment in the US and China.

The extreme weather that hit the United States resulted in a reduction in oil production and disrupted the availability of electricity.

The International Energy Agency (IEA) predicts the development of global oil consumption. This will be carried out simultaneously with the improvement of the global economy from the virus outbreak.

In its monthly report, the IEA raised its outlook for oil consumption this year by 230,000 bpd to 5.7 million bpd amid increasingly strong economic conditions in the US and China.

That prediction gives two-thirds of oil demand lost in 2020. The IEA says overall oil reserves, which rose last year due to the coronavirus outbreak, are now falling. This occurs when the vaccination process continues rapidly.

Besides that, the current global economic situation is in a better condition, said the IEA's statement, Thursday (15 April 2021).

The IEA has increased its forecast for global oil demand in 2021. Based on IEA data, the amount of oil reserves in industrialized countries is only 28.3 million barrels above the average reserves in the 2016-2020 period. However, the crude oil market remains calm for now due to the hectic wave of developing oil reserves due to the coronavirus in India and Brazil.

The incessant demand for oil could erode demand for oil in the midst of the idea of increasing production being implemented by The Organization of the Petroleum Exporting Countries (OPEC) and its allies or OPEC+ early next month.

At their meeting in early April, OPEC, Russia and other allied producers agreed to limit production by 350,000 barrels per day (bpd) in May, then 350,000 bpd in June and a further 400,000 bpd or more in the month of July wanes.

Under the deal, the cuts implemented by OPEC+ will be a little over 6.5 million bpd from May, compared to just under seven million bpd in April.

The prospect of an increase in oil supply is from Iran which continues to increase its sales to China. This happened in the midst of threats made to Iran. Iran produced 2.3 million barrels of crude oil one day last Monday.

The IEA predicts that if Iran and the US can reach an agreement to lift Iran's export ban, that number could increase by 1.5 million barrels per day. Although overshadowed by increased supply, the IEA predicts that the world's oil reserves will decrease significantly in the second half of this year.

It is predicted that OPEC will need to increase production by two million barrels per day to meet this increasing demand. The IEA increased its US oil demand forecast by 360,000 bpd in the 2nd quarter of 2021 and 370,000 bpd in the 3rd quarter of 2021.

Demand from China is predicted to increase by 160,000 barrels per day this year. "Fuel shipments in the US increased as the vaccination process progressed and the number of coronavirus infections fell," said an excerpt from the IEA report.


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