Oil prices may have surged to over $80 per barrel in recent weeks, but the International Energy Agency (IEA) predicts that an uptick in US oil production will help to bring some balance to the oil markets and relieve the upward pressure they are experience.
In its report, the IEA points out that the rebalancing will come from increased supply, rather than decreased demand:
“The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon. Contrary to hopes expressed in Glasgow at COP26 this is not because demand is declining, but rather due to rising oil supplies.”
Nevertheless, while it points to strong demand for petroleum-based fuel products, the recent surge in COVID-19 cases in Europe, high oil prices and reduced economic activity led the IEA to not substantially revise its growth estimates upwards. Predicted demand growth for 2021 is therefore 5.5 million barrels per day (bpd) and 3.4 million bpd for 2022.
The IEA points to recent rises in global oil production, with the post-hurricane recovery in the United States accounting for half of the 1.4 million bpd boost in October’s oil production.
While some relief on oil prices will be welcomed by businesses, it remains important to cut costs wherever possible. At TrAchem, our team can advise you on lubricant choices that can save energy and therefore money, such as the Mobil SHC 600 series of gearbox oil, which claims to improve energy efficiency by up to 3.6% compared to mineral-based reference oils.