WTI retests $70.50 after IEA says oil demand to surpass pre-pandemic levels by end-2022

“Global oil demand should surpass pre-covid levels by end of 2022,” the International Energy Agency (IEA) said in its latest monthly oil market report published on Friday.

Additional takeaways 

OECD industry stocks in April fell 61.3 million (mln) barrels below their 2016-2020 average to 2.926 bln barrels.

Recovery will be uneven not only amongst regions but across sectors and products.

Production rises at current pace set to be nowhere near levels needed to prevent further stock draws.

Total oil supply from OPEC+ set to increase by 800,000 bpd in 2021 if it sticks with existing policy.

Oil demand rise underlines enormous effort needed to get on track for climate goals.

OPEC+ needs to open the taps to keep world oil markets adequately supplied.

There is room in 2022 for OPEC+ to boost production by 1.4 mln bpd above its July 2021-March 2022 target.

Oil demand is set to rise 5.4 mln bpd in 2021 and a further 3.1 mln bpd in 2022.

Non-OPEC+ oil output is set to rise 710,000 bpd in 2021.

Market reaction

WTI holds the renewed upside near $70.50 on the upbeat headlines from the IEA.

The US oil was last seen trading at $70.47, marginally higher on the day, having staged a V-shaped recovery from daily lows of $69.69 reached earlier in the Asian session.

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