The world needs the OPEC+ group to open the taps further to balance the oil market in the coming months, on that everyone agrees. But there’s less unanimity on just how much more crude they will have to pump.
The International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries all say that global oil demand will continue to recover through to at least the end of next year. By that point, all three see consumption exceeding comparable 2019 levels and hitting new highs. But there is still some disagreement on the paths it will take to get there.
The EIA is the most bullish of the three major forecasting agencies. Unlike the IEA and OPEC, it doesn’t see a significant seasonal dip in demand at the start of next year, with continuing economic recovery offsetting almost all of the seasonal effects that normally crimp oil demand in the first half.
As a result, the U.S. government agency sees global oil demand back above its comparable pre-Covid level as soon as the second quarter of 2022. OPEC sees it getting there the following quarter, with the IEA taking the most cautious view on the recovery and joining the consensus only in the final three months of next year.
All three forecasters see oil demand growth slowing back toward the sort of levels seen before 2020, as the initial impact of the Covid-19 pandemic recedes and ceases to influence year-on-year comparisons. None sees oil demand peaking on a global basis, but the IEA stands out as the only one of the three to forecast consumption in the developed nations of the OECD falling below year-earlier levels in the final quarter of next year, with Europe the first region to experience a drop.