Pandemic Demand Destruction No Match For Supply Shortages

Pandemic Demand Destruction No Match For Supply Shortages

TOPSHOT - A man wears a protective face mask on the promenade of the Bund along the Huangpu River in ... [+] Shanghai. (Photo by Hector RETAMAL / AFP) (Photo by HECTOR RETAMAL/AFP via Getty Images) Concerns about weakening demand in oil markets are real but don't expect them to impede the bull run in prices. Benchmark crude oil prices are back over $110 a barrel despite widespread Covid-19 lockdowns in China and evidence that oil demand elsewhere in the world, including the U. S., is not as strong as many projected. The reason for resurgent prices is simple: markets are more concerned about the current crude supply shortage, which shows no signs of abating. There is no question that high fuel prices and China's "zero Covid" policy are causing some to question their demand forecasts for 2022. The International Energy Agency (IEA) forecasts global oil demand will average 99. 4 million barrels a day in 2022. That is down 800, 000 barrels a day from its forecast two months ago. The agency has recently revised its demand projections lower in response to the price spike after Russia invaded Ukraine and China's ongoing lockdowns. The lockdown situation in China is