International Energy Agency: Omicron hinders recovery, cuts crude demand forecast for next year

According to CNBC, the International Energy Agency (IEA) said on Tuesday that the recovery in global oil demand has slowed due to the impact of the new omicron strain.

The WORLD will produce more oil than it needs December face a bigger glut early next year, the IEA said. The IEA cut its average oil demand forecast for 2021 2022 by 100,000 b/d lowered its forecast for global oil demand by 600,000 b/d for a single quarter next year.

Screenshots of the CNBC report

The IEA expects global oil production to start outpacing demand in December, led by increased output the US OPEC+ members, that the upward trend will continue into 2022. Annual production in the US, Canada Brazil is likely to reach record levels. Record oil production is also possible in Saudi Arabia Russia.

Global oil supplies could surge by 6.4 million barrels a day by 2022, according to its projections.

Screenshots taken of the Reuters report

While oil supply is increasing, demand is still facing the impact of the epidemic. The SURGE in COVID-19 cases is expected to slow the recovery in global oil demand, with air travel jet fuel severely affected, the IEA reported. The emergence of a new strain of omicron will bring more restrictions on international travel, but it will upend the recovery in oil demand.

According to CNBC, the IEA's outlook is in slight conflict with OPEC+Z near expectations. OPEC+ is more optimistic.

OPEC+ said in its report on Monday that while the Omicron variant had hindered progress in economic recovery, the impact the new strain was "mild short-lived". OPEC+ raised its oil demand forecast for the first quarter of next year by 1.1 million b/d expects demand to reach 100 million b/d in the third quarter of 2022.

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Source: Guanchan.com

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