EUR/USD likely to find a peak near 1.25: UBS
(Recasts with possible gasoline demand peak)
By Noah Browning
LONDON, March 17 (Reuters) - An extended surge in oil prices
is unlikely as the world rebounds from the pandemic given ample
supply but changes are seen in demand and gasoline may have
peaked, the International Energy Agency (IEA) said on Wednesday.
"Oil's sharp rally to near $70 a barrel has spurred talk of
a new supercycle and a looming supply shortfall. Our data and
analysis suggest otherwise," the IEA said in its monthly report.
"For a start, oil inventories still look ample compared with
historical levels despite a steady decline ... On top of the
stock cushion, a hefty amount of spare production capacity has
built up as a result of OPEC+ supply curbs," it said.
The Organization of the Petroleum Exporting Countries and
its allies, a group dubbed OPEC+, largely kept limits on
production this month, galvanising the market and causing some
investors to predict a supercycle - a large, multi-year price
rise.
"The prospect of stronger demand and continued OPEC+
production restraint point to a sharp decline in inventories
during the second half of the year," the Paris-based energy
watchdog said.
"For now, however, there is more than enough oil in tanks
and under the ground to keep global oil markets adequately
supplied."
Changes to work and travel patterns wrought by the COVID-19
pandemic as well as governments' low-carbon targets have
permanently altered the trajectory for demand, the IEA added,
with gasoline possibly never to recover to pre-crisis levels.
Increased gasoline use in developing countries will be
offset by rising fuel efficiency and a switch to electric
vehicles in wealthy nations, the IEA said in its Oil 2021
five-year outlook, also published on Wednesday.
Together with reduced consumption due to increased remote
working likely to continue into the near future, gasoline demand
may have peaked in 2019, it said. "Consumption should continue to rise strongly in 2022 ...
narrowing the gap with pre-pandemic levels. However, beyond
that, gasoline demand is likely to stagnate for several years,"
the report said.
The Paris-based watchdog lowered its outlook for oil demand
for 2025 by 2.5 million bpd from its forecast last year but
maintains that oil demand has yet to peak and is set to return
to 2019 levels by 2023.
"Rapid changes in behaviour from the pandemic and a stronger
drive by governments towards a low-carbon future have caused a
dramatic downward shift in expectations for oil demand over the
next six years," the IEA said.
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OECD Industry stocks https://tmsnrt.rs/3eKLRos
OPEC+ spare production capacity https://tmsnrt.rs/30SZSYU
Oil supply response m-o-m change https://tmsnrt.rs/3lsoktU
IEA world oil demand outlook https://tmsnrt.rs/3rVbWop
Oil demand grows stalls https://tmsnrt.rs/3vBH8vm
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