A year after the pandemic and a price war sparked one of the weakest months in history for oil prices, the global energy market is well on its way to recovery, the International Energy Agency said Wednesday.
In its monthly report, the IEA raised its annual forecast for global oil demand in 2021 by 230,000 barrels a day to an increase of 5.7 million barrels a day. Earlier in the week, the Organization of the Petroleum Exporting Countries increased its 2021 demand forecast by 100,000 barrels a day.
While the Paris-based organization’s forecast recovery will still leave demand 3% short of 2019 levels, investors will likely take the agency’s increased demand forecast for the final quarter of 2021 as a sign that consumption is on its way to recovering.
Oil prices rose early Wednesday, extending mild gains so far this week. Brent crude, the global benchmark, was up 1% at $64.32 a barrel. West Texas Intermediate futures, the U.S. gauge, climbed 1.2% to $60.87 a barrel.
A weaker U.S. dollar, upbeat inventory figures from the American Petroleum Institute and speed bumps in nuclear negotiations between the U.S. and Iran were all buoying crude prices, said Warren Patterson, head of commodities strategy at ING.
