Oil market headed for surplus as omicron impact muted: IEA

Oil market headed for surplus as omicron impact muted: IEA

Oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, the International Energy Agency (IEA) said on Wednesday, while demand holds up despite the spread of the omicron coronavirus variant. “This time around, the surge is having a more muted impact on oil use,” the Paris-based IEA said in its monthly oil report. “While the steady rise in supply could see a significant surplus materialize in 1Q22 and going forward, available data suggest that 2022 is starting off with global oil inventories well below pre-pandemic levels,” it said. The United States, Canada and Brazil are set to pump at all-time highs for the year while Saudi Arabia and Russia could also break their output records. “World oil supply in 2022 has the potential for a massive Saudi-driven gain of 6.2 million bpd (barrels per day), provided the OPEC+ alliance continues to unwind the remainder of its record 2020 supply cut.” OPEC and other producers including Russia, a group known as OPEC+, is unwinding record output cuts put in place last year to counter a fall in demand caused by the pandemic. Its plan calls for adding back 400,000 bpd of production per