The weeks-long decline in global oil prices on fears of a possible recession is inconsistent with the prospect of tight supply and strong demand later this year. The International Energy Agency (IEA) said today in its regular monthly oil market report.
“The current pessimism in the market … is in stark contrast to the tighter market balance we expect in the second half of the year, when demand is expected to eclipse supply by almost two million barrels per day,” the IEA said, quoted by Reuters.
China hits a record
The IEA raised its forecast for global oil demand by 200,000 barrels a day to 102 million barrels a day. It said China’s economic recovery after the lifting of pandemic restrictions had exceeded expectations and that demand in China hit a record 16 million barrels a day in March.
China is the world’s largest oil importer and is expected to account for about 60 percent of global demand growth this year. Together with India and the Middle East, it would help offset the decline in demand in developed countries.
The United States and Brazil will contribute a modest 1.2 million barrels per day of oil supply growth this year. OPEC+ cuts agreed in April mean volumes supplied by the producer group will fall by 850,000 barrels a day between then and December, the IEA said. The group is made up of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia.
Source: ČTK
