IEA slashes oil demand forecast as fresh lockdowns temper with the recovery outlook in Q1
- Lowers global oil demand forecast by 600k bpd for Q1
- Lowers global oil demand forecast by 300k bpd for 2021 as a whole
- Global oil demand expected to recover by 5.5 million bpd still this year
- Global oil supply set to rise by more than 1 million bpd in 2021
- This follows a 6.6 million bpd drop in 2020
- There may be scope for higher supply growth given expected 2H 2021 demand improvement
I don't think this comes as too much of a surprise given the way things have started off this year, with lockdowns still prevailing in Europe and some parts of the world.
The fear is that the vaccine timeline runs into trouble and tighter restrictions may still be needed in Q2 or perhaps even Q3 if things go awry in the coming months.
That will temper with the oil outlook further, although prices are not really all too shaken up as the market continues to keep with the reflation narrative for the time being.
