Global oil demand seen reaching pre-pandemic levels by early 2022

Reuters reports that oil producers and traders said that global fuel demand is expected to reach pre-pandemic levels by early next year as the economy shrugs off pandemic woes.

While a persistent rise in COVID-19 infections in several markets has hurt recovery in demand for some refined products such as jet fuel, consumption trends of petrol and diesel indicate higher growth, the industry leaders said.

"We saw refining margins rebound as demand rebounded ... But overall for the world, there's still a lot of unutilised capacity and a lot of capacity has been taken off stream," said Eugene Leong, president of BP Singapore.

"The spare (refining) capacity is probably going to act as a little bit of a cap on margins," he said.

"This year alone we've seen some mega refining (and) petrochemical complexes start up, so I think that's going to be challenging for refining."

The International Energy Agency (IEA) has also forecast a robust rebound from the fourth quarter, citing "strong pent-up demand and continued progress in vaccination programmes".

It expects global oil demand to average 96.1 million bpd in 2021 and 99.4 million bpd in 2022, versus 90.9 million bpd in 2020. The OPEC expects demand to average 99.70 million bpd in the fourth quarter of 2021.