Global Oil Demand Downgraded Amid COVID-19 Resurgence

Source: IEA

The International Energy Agency downgraded its global oil demand forecast for the year, following the resurgence of the COVID-19 pandemic due to the spread of the delta variant. DBO is down 0.96%, BNO is down 1.02%.

• Global oil demand grew by 3.8 million barrels per day in June from May. This was led by the ease of restrictions in North America and Europe.
• Demand has since declined sharply in July and is likely to continue to drop amid the worsening progression of the pandemic.
• The latest demand outlook for the year is an average increase of 5.3 million barrels per day to 96.2 million barrels per day.
• Demand is expected to continue to increase in 2022 at an average of 3.2 million barrels per day.
• World supply grew by 1.7 million barrels per day in July to 96.7 million barrels per day, as Saudi Arabia finished its voluntary production cut and the recovery in the North Sea.
• Output is expected to increase further in the coming months after the Organization of the Petroleum Exporting Countries Plus and its allies finalized a deal on production.