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By Noah Browning
LONDON, Nov 12 (Reuters) - Global oil demand is unlikely to
get a significant boost from the roll-out of vaccines against
COVID-19 until well into 2021, the International Energy Agency
(IEA) said on Thursday, a view that curbed oil price gains since
vaccine progress was announced earlier this week.
"It is far too early to know how and when vaccines will
allow normal life to resume. For now, our forecasts do not
anticipate a significant impact in the first half of 2021," the
Paris-based IEA said in its monthly report.
"The poor outlook for demand and rising production in some
countries ... suggest that the current fundamentals are too weak
to offer firm support to prices."
Brent crude LCOc1 fell 0.8% to $43.46 a barrel in early
London trade, snapping three straight days of gains. O/R
While noting that OECD countries had modestly drawn down
their crude oil stocks for two months in a row by September, the
IEA said that storage levels were still not far from peaks in
May at the height of the pandemic.
It cited a resurgence of Covid-19 infections in Europe and
the United States and renewed lockdown measures for revising
down its outlook for global oil demand for 2020 by 400,000
barrels per day (bpd) compared with its last estimate.
The picture was partly brightened by improved expectations
for China and India, where the IEA raised its demand forecast.
Still, the forecast assumed no new waves of the pandemic.
Plans by the Organization of the Petroleum Exporting
Countries (OPEC) and allies such as Russia to boost output by 2
million bpd from January would mean supply would outweigh
demand, the IEA warned.
Draws on oil storage would halt in the first quarter of 2021
if the producer group carried through on its plans to taper
their production cut pact.
"Unless the fundamentals change, the task of re-balancing
the market will make slow progress," the IEA said.
The IEA revised up its prediction for demand growth in 2021,
which will still represent a drop of 3 million bpd below
pre-pandemic levels in 2019.
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Demand/supply balance https://tmsnrt.rs/3krEuRU
Non-OPEC supply annual change https://tmsnrt.rs/3ksMBO1
Oil supply response https://tmsnrt.rs/35nLQBV
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