Very different from OPEC forecasts! IEA: Omicron will affect the recovery of oil demand, reducing the daily demand for global oil next year

The International Energy Agency (IEA) said the global oil market has returned to supply exceeding demand since December and will face an even greater oversupply early next year as the Omicron variant disruption will hamper international shipping routes
.

The International Energy Agency (IEA) said in its monthly report that global oil supply is rebounding
from the current OPEC production increase and strategic reserve crude oil sales, to the record production of countries such as the United States, Canada and Brazil next year.
The IEA cut its oil demand forecast for 2022 by 100,000 barrels per day and cut its global oil demand forecast by 600,000 barrels
per day in the first quarter of next year.

Global oil inventories could increase
at a rate of 1.
7 million barrels per day in the first months of 2022 as jet fuel demand declines due to the emergence of the Omicron variant, the IEA added.

"Starting this month, global oil supply will exceed demand, which will ease the tight supply situation in the crude oil market
," the Paris-based IEA said in its monthly report.
"The steady increase in supply, coupled with the easing of demand, is starting to outstrip demand
.
"

Oil prices have so far remained firm amid the coronavirus pandemic, with Brent futures trading just below $75 a barrel as the use of petroleum products has not yet been hit
hard.
Overall, the IEA expects a reduction in demand of 100,000 barrels per day to have little impact on oil product consumption next year
, as higher vaccination rates limit the spread of variant viruses.

"The increase in the number of Covid cases is expected to slow temporarily, but it will not upend the recovery
of oil demand," the report said.

But the seasonal pullback in fuel demand, combined with the impact of the Omicron variant and a recovery in supply, will create an oversupply in the oil market early next year
.
As a result, the IEA lowered its forecast for global oil demand by 600,000 barrels
per day for the first quarter of this year.

Persuaded by US President Joe Biden, OPEC+, led by Saudi Arabia and Russia, agreed to continue to resume oil production
suspended during the coronavirus pandemic.
At the same time, the United States and other oil consumers believe OPEC's production increase is not enough and will release oil
from emergency reserves.

At the same time, the International Energy Agency said in the report that in addition to OPEC+, oil producers such as the United States, Brazil and Canada are also increasing oil production to record levels
.
U.
S.
oil production surged by 340,000 barrels per day in November as coastal oil production continued to grow, while higher oil prices led shale explorers to increase drilling
.

The IEA's forecast is not in line with OPEC's earlier forecast for world oil demand for 2022, in which OPEC maintained its forecast that world oil demand will grow by 4.
15 million b/d
in 2022.
Growth forecasts for this year also remain unchanged; OPEC also said it expects world oil demand to average 99.
13 million b/d in the first quarter of 2022, up 1.
11 million b/d
from last month's forecast.

"Some of the recovery previously expected in the fourth quarter of 2021 has shifted to the first quarter of 2022, followed by a more stable recovery
throughout the second half of 2022," OPEC said in the report.
In addition, the impact of the Omicron variant is expected to be mild and short-lived, as the world becomes more equipped to respond to the pandemic and its associated challenges
.
”

At press time, Brent crude futures rose 0.
19% to $74.
53 a barrel
.