China's Reopening to Drive Oil Demand to All-Time High in 2021, IEA Predicts

The International Energy Agency has predicted that China's swift return to normalcy after extended Covid-19 restrictions will result in a record-breaking level of oil demand in 2021.

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The International Energy Agency (IEA) has increased its projection for oil consumption in 2021 by nearly 200,000 barrels per day, bringing the total to 1.9 million barrels per day. This would result in an average of 101.7 million barrels per day, which is higher than before the pandemic and a record amount.
The oil market was taken aback by Beijing's sudden shift away from its no-nonsense attitude towards Covid cases, leading to speculation that China's reopening could quickly result in an increase in the country's oil consumption.

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The International Energy Agency (IEA) has reported that the economies of Europe and the United States have seen a sudden improvement, which is increasing the outlook for oil demand. Europe's economy is predicted to do better than expected due to the warmer weather, which has helped to alleviate the energy supply issues. Additionally, the Federal Reserve's attempts to control inflation have recently been successful.

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The International Energy Agency (IEA) reported that the quicker than expected reopening of China, a more optimistic economic outlook, and lower oil prices have all contributed to the increased oil demand forecasts.
The International Energy Agency (IEA) has revised its forecast for Chinese oil demand, increasing it by 100,000 barrels a day to 15.9 million barrels a day. This accounts for the majority of the revision, as China is the world's largest consumer of oil.

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The International Energy Agency (IEA) has predicted that a significant surge in the demand for aircraft fuels due to the revival of international travel will make up almost half of the total increase in oil demand this year. It is estimated that the consumption of jet fuels and kerosene, which are both used as aviation fuels, will rise by 850,000 barrels a day in 2021, following a similar surge in 2022.

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The International Energy Agency (IEA) has warned that China's reopening may not be a straightforward process, and that the recovery of oil demand is uncertain. This is due to the fact that there is a large amount of unreported Covid cases, as well as a weak economy. The IEA also noted that it would be difficult for Chinese households to increase their spending, as their finances are not in a good state.

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It is expected that difficulty and interruptions will continue in the near future. As China is facing a difficult winter, it is clear that the way out of this situation will be long and full of obstacles.

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On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) refrained from changing its demand projections, noting that the reopening of China could lead to a resurgence of Covid-19 cases, which could impede the recovery of oil demand.
The International Energy Agency (IEA) noted that the improved economic conditions in Europe are not necessarily beneficial for oil demand. This is due to the fact that high natural-gas prices and reduced gas supplies from Russia have led to the expectation that European countries will need to use more crude-derived heating fuels to make up for the shortfall.

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At the end of last year, the International Energy Agency (IEA) had predicted an increase in demand for oil. However, they recently announced that the demand would be lower than expected due to the unusually warm winter temperatures in Europe. This has caused fewer utilities to switch from natural gas to oil, resulting in a 200,000 barrel a day decrease in demand.

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The agency located in Paris maintained its forecast of 2022 oil consumption at 99.9 million barrels per day.