The sharp rise in cases of COVID-19 will affect the recovery in oil demand

The Energy Agency has lowered its forecast for oil demand.

The International Energy Agency (IEA) said that, the sharp rise in new cases of COVID-19 will also affect the recovery in oil demand before the introduction of vaccines and incentives helps in the second half of the year. "Border closures, social distances and blockades will continue to limit fuel demand until vaccines are more widely distributed, most likely until the second half of the year," the IEA said in its monthly report. At the same time, the Paris-based organization reduced its oil demand forecast for the first quarter of 2021 by 580,000 barrels (1 barrel = 159 liters) per day and its full-year 2021 outlook by 300,000 barrels / day. According to the IEA, supply and demand are well on the way to recovery this year, and the efforts of major producers to balance the market by reducing production are helping to reduce stocks around the world. However, given the expected increase in demand in the second half of the year, the IEA said "it will probably be necessary to supply much more oil to the markets". The cold winters in Asia and Europe, along with supply discipline from the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC + allies, have raised oil prices, the IEA said. In the case of shale mining in the USA, the agency expects it to remain at the current level.