International Energy Agency (IEA) lowered its forecast for global oil demand this year and cut its forecast for Russian oil supply loss in April in half.
On Wednesday, the IEA released a monthly report showing that with weak global demand outlook and IEA member states releasing emergency oil reserves, the agency now believes global markets are in equilibrium for most of the year.
IEA said:
oil prices have returned to the level close to the pre-Russia-Ukrainian conflict, but are still at an unsettling high, posing a serious threat to the prospects of global economic .
IEA lowers the forecast for global oil demand growth this year by 260,000 barrels per day. Despite this, global demand is expected to grow this year, with global average oil demand expected to be 99.4 million barrels per day in 2022, and increased by 21.9 million barrels per day, and it is believed that people's reluctance to use public transportation may stimulate oil demand.
Specifically, the IEA lowered the daily demand forecast for the first quarter of 2022 by 400,000 barrels to 98.5 million barrels per day; lowered the oil demand forecast for the second quarter of 2022 by 400,000 barrels to 98.3 million barrels per day; lowered the oil demand forecast for the third quarter of 2022 by 100,000 barrels per day to 100,001 million barrels per day; lowered the oil demand forecast for the fourth quarter of 2022 by 100,000 barrels per day to 105,000 barrels per day.
IEA also lowered its estimate of losses caused by sanctions on crude oil supply to Russia. IEA expects Russia's oil supply to drop by 1.5 million barrels per day in April, about half of the previous expectations. The agency said those supply losses could still double in May to 3 million barrels per day.
To cope with the pressure of rising oil prices after the Russian-Ukrainian crisis, IEA members announced last week that they would use a total of 240 million barrels of emergency oil reserves, the largest reserve released by the agency in history.
crude oil price has recently given up most of the gains , and the trading price on Wednesday was close to $100 per barrel.
IEA pointed out that OPEC+ member states have been refusing to speed up production growth because they believe the market will not face real shortages.
According to IEA data, OPEC+ member states only provide 10% of the supply planned to increase in March. Since the outbreak, the 19 members of the alliance have been working to reach a deal to stabilize the market, but as investments erode the capacity of , they only increase their oil by 40,000 barrels per day.
IEA said that OPEC+'s increase in production in March was 40,000 barrels per day, 360,000 barrels less than the planned target. The IEA pointed out that OPEC+ countries insist that there is no supply shortage, and the United States and IEA release inventory to help prevent serious oil shortages.
In terms of inventory, the IEA monthly report shows that global oil inventories have declined for 14 consecutive months. html Global oil inventories in February were 714 million barrels less than the end of 2020 level, and OECD accounted for 70% of the decline.
As for the OECD, in February, OECD inventory fell by 42 million barrels to 2.61 billion barrels; industrial inventory fell sharply in February, with being 320 million barrels lower than the five-year average. However, preliminary data showed that OECD oil inventories increased by 8.8 million barrels in March.
IEA Market and Industry Department Head Toril Bosoni said in an interview with Bloomberg :
We now see that economic forecast players are continuing to lower their outlook for the world economy, which obviously will have an impact on oil demand.
market does look more balanced.
According to IEA data, global oil consumption will increase by 1.9 million barrels this year, reaching an average of 9.4 million barrels per day.
Bosoni also said: "Oil demand is still recovering from the epidemic. The aviation industry is recovering and there is suppressed demand, so we expect growth. But if the economic outlook deteriorates, demand will have obvious downward risks."
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