SINGAPORE- Global oil demand is expected to rise by nearly 7 percent this year, boosted by quicker vaccine distribution and a better economic outlook, consultancy Wood Mackenzie said on Thursday.
Total liquids demand is expected to average 96.7 million barrels per day (bpd) in 2021, 6.3 million bpd higher than last year when the Covid-19 pandemic caused an unprecedented oil demand shock.
“Our short-term forecast assumes vaccine distribution accelerating through 2021 and is underpinned by 5 percent expected growth in global GDP, according to our macroeconomic outlook, following the global economy’s 5.4 percent contraction last year,” said the consultancy’s vice president Ann-Louise Kittle.
“The pace and strength of the global liquids demand recovery will depend on the pace of Covid-19 vaccine distribution and global economic recovery.”
In terms of supply, WoodMac expects oil output from the U.S. Lower 48 states to reduce by about 500,000 bpd this year, moderating from last year’s decline.
Rig activity is expected to continue to rise but much of the recovery rate will be dependent on oil prices and the industry’s willingness to spend on volume growth again, WoodMac said.