According to the International Energy Agency's recent monthly report, the global oil demand is predicted to rise this year. This surge is linked to a positive projection for the U.S. economy and an increase in oil storage and transport, or "bunkering." It is anticipated that oil consumption will revert to trends seen prior to the global pandemic. There is also growing adoption of electric vehicles, which offer greater efficiency.
The global oil demand for this year has now been adjusted to 1.3 million barrels per day (bpd), marking an increase of 110,000 bpd from the previous month's prediction. The Paris-based IEA ascribes this uplift to increased usage of bunker fuel, provoked by disruptions in trade flows. Such disruptions include Houti attacks on tankers in the Red Sea, causing extended shipping routes and accelerated vessel speeds.
The demand for U.S. ethane, largely driven by its petrochemical sector, also supports this upward trend in oil demand. Nevertheless, this year's growth in demand is expected to be more gradual than last year's 2.3 million bpd. The IEA points out that a slowdown is already evident in recent data, suggesting a return to oil consumption patterns resembling those in a pre-pandemic world.
The report also anticipates a restraint on oil use, stemming from a weaker economic outlook, efficiency enhancements, and the flourishing sales of electric vehicles (EVs). In terms of global supply, it is predicted to increase by 800,000 bpd to 102.9 million bpd this year. This figure takes into account a downward adjustment of OPEC+ output. Interestingly, the IEA had predicted a record global oil supply of 103.8 million bpd in its January report.
