New York November 16 2021: The International Energy Agency on Nov. 16 signaled a likely easing of oil market tightness, forecasting world supply to rise by 1.5 million b/d in November-December on the back of a US output resurgence, and highlighting a recovery from refinery maintenance.
In its latest monthly oil market report, the Paris-based IEA noted that high prices, driven partly by the policies of OPEC+ nations, were serving both to “temper” the recovery in oil demand and spur US shale output.
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The IEA nudged up its 2022 demand growth estimate by 100,000 b/d to 3.4 million b/d, saying demand was being supported by “robust gasoline consumption and increasing international travel,” but added, “new COVID waves in Europe, weaker industrial activity and higher oil prices will temper gains.”
On the supply side it revised its fourth-quarter supply estimate higher by 330,000 b/d and said supply by the end of the year would reach 99.2 million b/d, up 6.4 million b/d year on year.
In the refining segment, the IEA signaled a return from major maintenance impacts, saying throughput globally would rise by 3 million b/d between October and December before “pausing” in the first half of 2022.
The expectation of renewed US shale activity contributed to the IEA lowering its near-term estimates of the “call” for OPEC crude, by 200,000 b/d for the fourth quarter of 2021 and first quarter of 2022, to 28.3 million b/d and 27.5 million b/d, respectively.
“Higher oil prices are unlocking increased flows from the US shale patch, especially in the vital Permian Basin. We expect 710,000 b/d more Light Tight Oil during Q4 2021 compared with a year ago and a further 710,000 b/d in 2022 versus this year,” the IEA said, noting rising shale sector rig numbers.
