Global oil demand growth is expected to jump by 380,000 barrel per day this year, to reach 2.1 million barrels per day, driven by increasing use for power generation and the switch from gas, a report by International Energy Agency has found. It is up from the IEA's earlier forecast of 1.8 million bpd in June.
The agency, with headquarters in Paris, predicted the total world oil demand to reach 99.7 million bpd in 2022 and surpass the pre-Covid levels at 101.8 million bpd next year. World oil supply is set to rise by a further 1 million bpd by year-end, it said.
The gains mask “relative weakness” in other sectors and a slowdown in growth from 5.1 million bpd at the start of the year to less than 100,000 bpd by the fourth quarter, the agency said in this month's oil market report.
The 23-member Opec+ supergroup of oil producers last week agreed to boost output modestly by 100,000 bpd next month amid a slowdown in the global economy.
Oil prices have remained volatile this year. Brent touched about $140 a barrel in March shortly after Russia’s invasion of Ukraine, now in its sixth month, and the subsequent sanctions imposed by the US and the UK on the import of Moscow’s crude.
However, oil fell in the past few months as concerns grew over the possibility of a looming recession hitting fuel demand globally.
Last month, the International Monetary Fund lowered its growth forecast for the global economy to 3.2 per cent this year, from its previous forecast of 3.6 per cent in April based on factors such as Russia’s war in Ukraine, high inflation and the Covid-19 pandemic.
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