IEA says global oil demand to witness strong recovery in Q4 2021

Oil drilling rigs

After a three-month decline in global oil demand due to the spread of COVID-19 infections in Asia, already signs are emerging of coronavirus cases abating with demand, the International Energy Agency (IEA) said on Tuesday.

Strong pent-up demand and continued progress in vaccination programs are forecast to underpin a robust rebound from Q4 2021.

IEA expects demand to rebound by a sharp 1.6 million barrels per day (bpd) in October.

The Paris-based agency lowered its forecast for global crude oil demand growth by 105,000 bpd in 2021, due to the outbreak of the Delta variant. However, it expects an increase in oil demand by 3.2 million bpd next year, which is 85,000 bpd higher than previously estimated.

The report indicated that Hurricane Ida shut in 1.7 million bpd of oil production along the US Gulf Coast at August-end.

World oil supply fell 540,000 bpd month-on-month (m-o-m) in August to 96.1 million bpd.

IEA stated that it is only by early-2022 that supply will be high enough to allow oil stocks to be replenished.

The total industry stocks of Organization for Economic Co-operation and Development (OECD) declined by 34.4 million barrels in July to stand at 2.850 billion barrels.