Global oil demand dropped 6% in 2021

Global oil demand is forecast to increase 6% this year based on expectations that vaccination campaigns continue to expand and the pandemic largely comes under control, according to the International Energy Agency (IEA) on Wednesday.

Having contracted by 8.7 million barrels per day (bpd) in 2020, global oil demand is estimated to rise by 5.4 million bpd to an average of 96.4 million bpd, the IEA said in its monthly oil report.

The agency warned that the recovery in global oil demand remains fragile as surging Covid cases in countries such as India and Thailand offset recent more positive trends in Europe and the US.

Pointing that the consumption is still lower than at the end of 2020, the EIA said the decline also reflects to a large extent seasonal patterns and the Covid outbreaks registered in Brazil, India and Europe, as well as February’s freezing weather in the US contributed to a slower recovery in global demand.

In 2021, the highest consumption is forecast to be in the Asia Pacific region with 35.8 million barrels per day, followed by the Americas with 30.2 million barrels and Europe with 13.8 million barrels.

Global supply rises

The IEA said global oil supply increased by 330.000 bpd in April to 93.37 million bpd as higher flows from the US, Russia and Brazil combined with a substantial increase in biofuels more than offset hefty maintenance outages in Canada.

The number is still 6.7 million bpd below April 2020 when many OPEC+ producers pumped at or near record highs. During May, Saudi Arabia is expected to lead a far bigger boost in world oil output as the OPEC+ alliance further eases output cuts.

OPEC crude oil production reached 25.04 million bpd in April, recording an increase of 70,000 bpd compared to the previous month.

Non-OPEC production also saw an increase of almost 370.000 bpd to 63.14 million bpd.