The global supply and demand of crude oil are on course to continue rebalancing this year after the turmoil brought by the pandemic in 2020, the International Energy Agency said Thursday.
Despite increasing its estimates for oil output in 2021, the IEA said in its monthly market report that a recovery in demand would outstrip production in the second half of the year, prompting “a rapid stock draw” of the glut of crude that has built up since the pandemic began.
The agency significantly increased its forecast for producing nations outside of the pact between the Organization of the Petroleum Exporting Countries and allies such as Russia, raising its projections for non-OPEC supply growth by 290,000 barrels a day to an increase of 830,000 barrels a day this year.
At the same time, the IEA trimmed its forecast for global oil demand by 200,000 barrels a day to 96.4 million barrels—around 3% less than in 2019—but said part of that was because of a change to historic data.
Even so, with much of the developed world grappling with fresh Covid-19 variants and lockdown restrictions, a brightening economic outlook and strict supply discipline from OPEC-plus are hastening the drawdown in global oil inventories, the IEA said. It added that “the prospect of tighter markets ahead” has been responsible for a rally in oil prices in recent weeks.