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By Noah Browning
LONDON, Jan 19 (Reuters) - Oil demand recovery will take a
hit from a spike in new coronavirus cases before vaccine
roll-outs and stimulus measures help in the second half of the
year, International Energy Agency (IEA) said on Tuesday.
"Border closures, social distancing measures and
shutdowns...will continue to constrain fuel demand until
vaccines are more widely distributed, most likely only by the
second half of the year," it said in its monthly report.
"This recovery mainly reflects the impact of fiscal and
monetary support packages as well as the effectiveness of steps
to resolve the pandemic," the IEA said.
The emergence of new strains of the virus, renewed lockdowns
in China and logistical hurdles facing vaccine roll-outs
contributed to the IEA's gloomier outlook.
Noting that an improvement to global oil demand went into
reverse in December, the Paris-based watchdog lowered its
forecast for the first quarter by 580,000 barrels per day (bpd)
and its outlook for 2021 by 300,000 bpd.
Both supply and demand are on track for recovery this year,
and efforts by top producers to balance the market by reining in
output helped lower stockpiles of crude and oil products
worldwide, though oil stocks remained stubbornly close to a May
peak.
Given an expected demand increase in the second half of the
year, however, "much more oil is likely to be required".
Cold Asian and European winters along with supply discipline
by the Organization of the Petroleum Exporting Countries (OPEC)
and its allies boosted crude prices, the IEA said, while the
U.S. shale industry was expected to keep production flat.
"If they stick to those plans, OPEC+ may start to reclaim
the market share it has steadily lost to the U.S. and others
since 2016."
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Demand/supply balance https://tmsnrt.rs/2NidJEN
Oil supply response m-o-m change https://tmsnrt.rs/3bQRpw8
OPEC+ poised to reclaim market share https://tmsnrt.rs/3sCAK5k
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