In its latest monthly oil market report, the International Energy Agency (IEA) lowered the forecast for global oil demand by 600,000 barrels per day (bpd) for Q1 2021 and by 300,000 bpd for 2021 as a whole.
Additional takeaways
Products led fall in stocks, with OECD industry crude stocks only 48.9 million (mln) barrels below may peak.
OECD crude oil stocks in November fell by 23.6 mln barrels to 3.108 bln barrels, were 167 mln barrels above five-year average.
Global refinery throughput expected to rebound by 4.5 mln bpd in 2021.
There may be scope for higher supply growth given expected H2 2021 demand improvement.
Oil demand fell by 8.8 million bpd in 2020.
Global oil supply set to rise by more than 1 mln bpd in 2021 after falling by 6.6 mln bpd in 2020.
Demand recovery to reflect stimulus packages and steps to resolve pandemic.
Global oil demand is expected to recover by 5.5 mln bpd to 96.6 mln bpd in 2021.
Global vaccine roll-out is putting fundamentals on a stronger trajectory for the year.
Resurgence in COVID-19 cases is slowing oil demand rebound.
WTI off the highs
On the downward revision to the global oil demand estimate for Q1 2021, WTI eased off daily highs of $52.70. The US oil erases gains to trade flat around $52.45, as of writing.
Despite the pullback, the black gold remains buoyed by the prospects of fiscal stimulus-driven global economic recovery. Stronger Chinese demand for oil and the US dollar’s pullback also remains oil-supportive. Focus shifts to Yellen’s speech for more hints on the US fiscal stimulus.
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