The year 2020 will go down in history for many things. In the case of oil, it will stand out as the year in which the demand for crude fell to levels not seen in decades (half the world spent months in severe confinement). In 2021 the situation reverses and demand will be stronger than supply , reducing the oil reserves accumulated during the past year and raising the prices of ‘black gold’.
The projected growth in oil supply for the current year will not be enough to offset the expected increase in global demand for crude oil once travel restrictions are lifted as vaccination campaigns progress, the government has warned. International Energy Agency (IEA) in its latest monthly bulletin.
Oil reacts with timid rises. A barrel of Brent is above 69 dollars and once again takes a closer look at the level of 70. For its part, West Texas, a benchmark in the US, advanced 1% and rose to 66 dollars per barrel .
IEA: “In the current OPEC + production scenario, supply will not increase fast enough to keep pace with the expected recovery in demand”
However, the Paris-based agency has slightly revised down its forecast for oil demand growth in 2021, to 5.4 million barrels of oil per day, which represents a cut of 270,000 barrels per day compared to its previous forecast and leaves the forecast for world oil consumption at 96.4 million barrels a day. Still it will continue to outperform the offer.
Demand will skyrocket in months
In this sense, as vaccination rates increase and mobility restrictions decrease, he expects global oil demand to skyrocket from the estimated 93.1 mb / d for the first quarter of 2021 to 99.6 mb / d by the end of the year, despite having cooled down its consumption growth forecasts for Europe, North America and India.
However, the IEA anticipates that, under the current scenario, global oil supply in 2021 will only increase by 1.4 million barrels per day, following the 6.6 mb / d collapse in 2020.
“In the current OPEC + production scenario, supply will not increase fast enough to keep up with the expected recovery in demand,” the agency warns.
A blessing for OPEC
In this way, he considers that the “growing supply and demand gap” paves the way for greater flexibility in the supply cuts of OPEC +, which will meet again on June 1 to review its policy.
At that time, moreover, there could be clarity about the indirect nuclear talks between Iran and the United States taking place in Vienna that could result in the return of Iranian oil to the market.