LONDON, Oct. 14 (Reuters) – A global energy crisis is expected to boost oil demand by 500,000 barrels per day (bpd) and could fuel inflation and slow the global recovery from the COVID-19 pandemic, the International Energy Agency (IEA) Thursday.
Oil and natural gas prices recently hit multi-year highs, pushing electricity prices to record highs as widespread energy shortages hit Asia and Europe.
“Record-breaking coal and gas prices along with power outages are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations buzzing,” the IEA said in its monthly oil report.
“Rising energy prices are also adding to inflationary pressures which, together with the power outages, could lead to lower industrial activity and slower economic recovery.”
As a result, global demand for oil next year is now expected to return to pre-pandemic levels, the Paris-based agency said.
It has revised its demand forecast for this year upwards by 170,000 b / d, or a total addition of 5.5 million for the year, and by 210,000 b / d in 2022, or a total addition of 3 ,3 million.
An increase in demand in the last quarter resulted in the biggest drawdown on inventories of petroleum products in eight years, he said, as storage levels in OECD countries were at their highest. low since early 2015.
“Provisional data for August already indicates that there is an unusually high demand for fuel oil, crude and middle distillates for power plants in a number of countries, including China, Japan and Pakistan in Asia, l ‘Germany and France in Europe and Brazil,’ the IEA said. noted.
Meanwhile, the IEA has estimated that producer group OPEC + is expected to pump 700,000 bpd below estimated demand for its crude in the fourth quarter of this year, meaning demand will exceed supply at least. until the end of 2021.
The group’s unused production capacity is expected to decline rapidly, he warned, from 9 million bpd in the first quarter of this year to just 4 million bpd in the second quarter of 2022.
This production capacity is concentrated in a small handful of states in the Middle East, he said, and its decline underscores the need for increased investment to meet future demand.
“Increased spending on clean energy transitions is the way forward, but it has to happen quickly or global energy markets will face a bumpy road,” the report said.
Releasing its flagship annual energy outlook ahead of a key climate conference in Britain next month, the IEA said on Wednesday that the economic recovery from the pandemic was “unsustainable” and relied too much on fossil fuels.
Investments in renewable energy must triple by the end of the decade if the world hopes to effectively tackle climate change, he said on Wednesday. Read more
Reporting by Noah Browning; Editing by David Goodman and Edmund Blair
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