Global oil demand on its way to recovery based on the latest forecast of the International Energy Agency (IEA), the WSJ reported Wednesday.
- The IEA raised its annual forecast for global oil demand by 230,000 barrels a day to an increase of 5.7 million barrels a day in 2021.
- The figures are still 3% short of 2019 levels, but investors will likely take this as a sign that consumption is on its way to recovery.
- The IEA trimmed its non-OPEC supply growth forecast by 90,000 barrels a day to 610,000 barrels a day in 2021, with the U.S. supply set to decline by 100,000 barrels a day after falling by 600,000 barrels a day last year.
- The Organization of the Petroleum Exporting Countries (OPEC) earlier in the week increased its 2021 demand forecast by 100,000 barrels a day.
- OPEC’s capacity of 6 million barrels a day means producers within the cartel will have the flexibility to meet changes in demand. This does not include Iran’s capacity of 1.5 million barrels a day as Tehran negotiates to revive the 2015 nuclear deal with the U.S.
- The global benchmark Brent crude was up 1% at $64.32 a barrel, while the West Texas Intermediate futures climbed 1.2% to $60.87 a barrel on Wednesday.