Paris:The Omicron variant of the coronavirus will slow the recovery in global oil demand but the market will be “more comfortable” in 2022, the International Energy Agency said on Tuesday.
The oil market “seems to be doing better than it has been for some time,” wrote the IEA in its latest monthly report.
The emergence of Omicron in late November “triggered a sharp drop in oil, but the initial pessimism has now given way to a more measured response,” he said.
“The increase in the number of new cases of Covid-19 is expected to temporarily slow, but not upset, the recovery in oil demand,” the IEA wrote.
He said “the new containment measures put in place to stop the spread of the virus are likely to have a more moderate impact on the economy compared to previous waves of Covid, especially due to widespread vaccination campaigns.”
The IEA, which brings together oil-consuming countries and advises governments on energy policy, said it had downgraded its forecast for global oil demand by 100,000 barrels per day on average for this year and l next year due to new restrictions on international travel.
The agency said it now expects global oil demand to increase by 5.4 million barrels per day in 2021 and 3.3 million in 2022, when it will return to pre-pandemic levels. to 99.5 million barrels per day.
On the production side, global oil production was set to exceed demand from December, the IEA predicted, driven by higher production in the United States and the countries that make up the producer group. of OPEC + oil.
Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and their allies agreed to stick to production increases slated for January, despite economic uncertainties over Omicron.
âAs the upward trend in supply stretches through 2022, the United States, Canada and Brazil are expected to pump to their highest annual levels ever,â the IEA said.
“Saudi Arabia and Russia could also set records, if the remaining OPEC + cuts are reversed entirely.”
This could lead to an oversupply of 1.7 million b / d in the first quarter of 2022 and 2.0 million b / d in the second quarter.
“If that were to happen, 2022 could indeed become more comfortable,” the IEA said.