Global oil demand will rebound next year as the world emerges from the coronavirus pandemic, but recovering to pre-crisis levels may take a couple of years, the International Energy Agency said. Fuel use around the world will remain 2.5% lower next year than in 2019, largely because of the “the dire situation of the aviation sector,” the Paris-based agency said in its first detailed assessment of 2021.
The first half of this year is “ending on a more optimistic note” because demand losses during lockdowns to curb the spread of coronavirus weren’t as severe as expected, it said. Output cuts by OPEC+ and shutdowns in the U.S. should put the market into deficit in 2021, depleting the massive 1.5 billion-barrel surge in inventories seen so far this year.
Global oil demand will stay below pre-crisis levels next year
Source: IEA
Oil prices were trading above $40 a barrel in London on Tuesday, double the levels seen in late April, as economic activity resumes and the Organization of Petroleum Exporting Countries and its allies slash supply. The IEA — which advises most major economies on energy policy — bolstered its demand estimate for the second quarter by 2.1 million barrels a day, tempering some of the massive drop. Lifestyle changes such as working remotely won’t trigger a long-term leveling off in fuel use, said Fatih Birol, the agency’s executive director.