Oil supply growth expected to lag behind demand next year

Global oil demand will rise above pre-pandemic levels next year following a three-year Covid-19 shutdown and the economic shock of the Ukraine war, the International Energy Agency says. .

Much of next year’s demand growth will be driven by China, as the country emerges from the Covid-19 shutdown, while advanced economies are expected to face a deteriorating economic outlook and rampant inflation.

Meanwhile, the IEA expects supply growth to lag behind demand, fueling an already tight market that has seen high price deficit of 500,000 bpd. U.S. oil producers are expected to underpin increased supply next year, while members of the Organization of the Petroleum Exporting Countries are seen as key continue to struggle to achieve their output goals.

Crude oil demand will grow 2.2 million bpd to 101.6 million bpd in 2023, bringing it above 2019 levels for the first time since the pandemic first hit, the agency said. The Paris headquarters said Wednesday in its closely watched oil market report. . This is the first time the IEA has released a forecast for 2023.

The IEA says developed nations in Europe and North America contribute the most to recovery demand in 2022, but less developed economies that are not members of the Organization for Economic Cooperation and Development. The economy will account for 80% of oil demand growth by 2022, the IEA said.

China, that Economic growth has struggled this year The IEA said a 930,000 bpd rise in oil demand as a result of a recovery in Covid-19 cases and shutdowns, is expected to see oil demand grow by 930,000 bpd next year. 2023, helping to re-establish “its position as the main engine of global oil demand growth”. .

Meanwhile, a rebound in international travel next year will drive jet fuel demand up 990,000 bpd by 2023, it said.

However, oil producers are expected to struggle to keep up with the rapid pace of recovering oil demand. The IEA expects global oil supply to grow by 1.3 million bpd to 101.1 million bpd in 2023, leaving a deficit of 500,000 bpd.

Oil prices fluctuate between small profit and loss Wednesday as traders await the Federal Reserve’s monetary policy meeting later in the day. Brent crude, the international oil benchmark, fell 0.2 percent to $120.93 a barrel while West Texas Intermediate, the U.S. oil benchmark, dropped 0.2 percent to $118.68 a barrel.

Countries in Europe and North America, which have spent years shifting their economies to greener sources of energy, have been reluctant to pump more oil to ease the looming brewing supply crisis. after the Russian invasion of Ukraine.

Major oil producers including OPEC+ – an alliance of OPEC and non-OPEC producers led by Russia – have struggled to hit their target of modest, besieged supply gains due to technical problems and capacity limitations.

The IEA said supply problems fell short of 2.8 million bpd last month between the group’s target and actual output, the IEA said on Wednesday.

The IEA forecasts the OPEC+ problem will continue until 2023. The agency forecasts OPEC+ production will fall by 500,000 bpd to 51.1 million bpd in 2023. Meanwhile, sources Supply from non-OPEC+ members is forecast to increase by 1.8 million bpd to 50 million bpd.

For the current year, the IEA left its demand forecast unchanged at 99.4 million bpd. In 2019, before the pandemic hit, demand was at 100.4 million barrels.

The IEA raised its 2022 oil supply forecast by 600,000 bpd to 99.8 million bpd. That means the agency sees a 400,000 bpd surplus in the oil market this year.

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