OPEC and the IEA see bullish oil demand this year. Here’s why they’re spot on

  • Date: 16-Apr-2021
  • Source: CNBC
  • Sector:Oil & Gas
  • Country:Gulf
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OPEC and the IEA see bullish oil demand this year. Here’s why they’re spot on

The recovery from the pandemic is quickly accelerating, at least based on red-hot demand in the oil market.

The International Energy Agency and OPEC forecast bullish demand for oil in 2021 - the IEA this week said producers may need to increase supply by 2 million barrels per day to catch up to demand, while OPEC raised its own forecasts to 5.95 million barrels per day for the year.   

Regina Mayor, global head of energy at KPMG, says the forecasts are on the money. She sees three tailwinds that should continue to fuel demand into the summer and beyond.

"One is the accelerated pace of vaccinations. Particularly in countries like the U.S. and the U.K., we're really seeing vaccine rollouts exceed our expectations. Number two, we're continuing to see strong stimulus spending from governments to encourage consumer activity and consumer spending," Mayor told CNBC's "Trading Nation" on Thursday.

The third reason? Mayor says it's basic human behavior.

"We're all really sick and tired of being quarantined and having our movements restricted. You're seeing some anecdotal [and] very specific data points that point to this," she said, highlighting TSA crossings in the U.S. airports and miles driven on interstate highways at pandemic highs.

High expectations for