Global oil demand on the rise
Global oil consumption is forecast to return to pre-pandemic levels in 2022
By ATB Economics 7 April 2021 1 min read
Average annual global oil consumption will rise by 5.5 million barrels per day in 2021 compared to last year, according to the Short-Term Energy Outlook released by the U.S. Energy Information Administration (EIA) yesterday,.
The rebound is not, however, enough to get back to the pre-pandemic level, with global consumption still down by 3.5 million barrels per day compared to 2019.
Global consumption will return to pre-pandemic levels in 2022.
Of critical importance to Alberta’s oil patch is that U.S. and Canadian oil consumption are forecast to grow this year and next, although by not quite enough to regain all the ground lost in 2020. U.S. consumption in 2022 is forecast to be 0.6 per cent below its 2019 level; Canada’s is expected to be 3.1 per cent lower.
Consumption is, of course, only one side of the equation. Fortunately, the EIA is also forecasting a balanced market with supply roughly in line with demand over the next two years.
Here’s the catch. The supply forecast is hanging by a thread held by OPEC. If the cartel holds fast and does not flood the market, prices should stay relatively strong.
The other wild card is the path of the pandemic and its impact on demand. The forecast assumes strong GDP growth in the U.S. and the continued reopening of the global economy as vaccination levels increase.
Answer to the previous trivia question: According to DataReportal, there were an estimated 4.66 billion internet users in the world (59.5 per cent of the global population) as of January 2021.
Today’s trivia question: Which country produces more oil: Canada or China?