IEA Lowers Global Oil Demand Forecast
January 19, 2021
The International Energy Agency lowered forecast for global oil demand as more lockdowns to contain the pandemic tempered the recovery expected this year, according to a Reuters report. “The global vaccine roll-out is putting fundamentals on a stronger trajectory for the year, with both supply and demand shifting back to growth,“ the agency said in a monthly report. “But it will take more time for oil demand to recover fully as renewed lockdowns in a number of countries weigh on fuel sales. The IEA cut its consumption estimate for this quarter by 600,000 barrels per day. This news has kept the market flat this morning.
Late last week Halliburton reported that it had deployed the industry’s first successful electric grid-powered hydraulic fracturing operation.
Canadian pipeline company Enbridge Inc. has said it will not comply with Michigan Governor Gretchen Whitmer’s notice ordering it to shut down its Line 5 in May after terminating the easement for the oil and natural gas dual pipeline in the Straits of Mackinac in Northern Michigan.
It is being widely reported the President-elect Joe Biden is planning to cancel the permit for the Keystone XL pipeline project very likely one of his first action in office. The other energy related item is rejoining the Paris climate change accord. These news items and others about President-elect Joe Biden’s energy policies has had a general overtone for the market or higher prices. One of the questions about this is have this already been priced into the market is this current rally or will there be more upside as the agenda become clearer. Another issue is that more stimulus is projected to come into the economy and that should drive more demand.
The International Monetary Fund’s Managing Director, Kristalina Georgieva, said the global economic outlook remained highly uncertain given the pandemic, and a growing divergence between rich and poor countries requiring the IMF to find more resources.