International Energy Agency trims 2021 oil demand forecast

Andrew Cummings
January 20, 2021

Oil demand recovery will take a hit from a spike in new coronavirus cases before vaccine roll-outs and stimulus measures help in the second half of the year, International Energy Agency (IEA) said on Tuesday.

Methane is the second greatest cause of global warming after carbon dioxide (CO2).

Both supply and demand are on track for recovery this year, and efforts by top producers to balance the market by reining in output helped lower stockpiles of crude and oil products worldwide, though oil stocks remained stubbornly close to a May peak.

While carbon dioxide emissions from the burning of fossil fuels are the main source of greenhouse gases, methane contributes significantly to the problem as well because it is so much more effective than CO2 at trapping heat in the atmosphere.

The IEA estimated that between 2020 and 2030, emissions will need to decrease by more than 70%, reaching levels of around 20 metric tons per year.

An unprecedented deal in April between the Organization of Petroleum Exporting Countries, Russia and other nations cut oil production by around 10 million barrels per day, or 10% of pre-coronavirus global demand.

The gas is usually emitted during the production and transport of coal, natural gas and oil.

The satellite data suggests Russian Federation, the US, Iraq and Turkmenistan have the largest levels of total methane emissions amongst oil and gas producers in 2020.

"There is clearly a risk that this downward trend will be reversed by an increase in production to fuel a rebound in global economic activity".

According to the IEA, global demand in 2020 was 8.8 million bpd lower than in 2019, recording an 8.8% decrease to 91.2 million bpd.

In April previous year, the members of the Organization of Petroleum Exporting Countries (OPEC), Russia and other key oil producers, agreed to trim production by 10 million barrels per day in a bid to revive crude prices.

Production was also hit by the United States sanctions on Venezuelan output and civil war in Libya.

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