World Oil Demand Might Got Back To Pre-covid Levels By 2022
Due to the COVID-19 situation, there was a huge downfall in different markets. One of the most impacted markets of the global economy was the global oil market. This market was hit effectively with the covid-19 pandemic. But it is also one of the first markets that revived on its own.
However, it is not completely true to say that this market revived itself completely. The revival of this market depends upon the demand that occurred after the recovery from the pre-covid pandemic.
No doubt the increased oil demand helped it recover. But there are market forecasts about this commodity that claim that the oil demand will be back to pre-covid levels by 2022.
Now the question is whether the current situations are indicating that the oil demand will get back on track or not? All this analysis about the oil market is going to be evaluated. The oil futures, Brent crude oil price and other factors related to this market will be analyzed here in this post.
Pre-pandemic Situation Of Oil Demand and Market
Before we analyze the forecast about the petroleum market or petroleum products, we have to analyze the crude oil prices in the past. We are not going into the history of the price of oil. But we are going to have a look at the pre-pandemic situation of the oil market. Traders must have to go through this research and analysis before believing in any forecast.
Increasing Oil Demand
The oil demand was in an upward direction movement according to the historical data of the market. The energy information administration out there forecasted that there will be more oil supply to meet the exact oil demand.
At that time the natural gas or gasoline market was going smoothly. Oil was not having oversupply like other commodities and oil companies were trying hard to fulfil the demand.
IEA Prediction About Oil
According to the International Energy Agency (IEA), the oil market was supposed to expand in the next year. Here we are talking about the oil forecasts for the global market. It was 2019 when IEA predicted such situations for the oil market.
There was a prediction of an increase worth 825000 barrels a day in the next year. And the prediction was that oil companies will be exporting more oil next year.
Oil Prices In 2019
The spot price is never decided by the oil producers only. The market volatility, crude oil production rate, refinery costs, traded oil futures, etc. are going to decide the price of crude. The Supply-and-demand ratio also decided the oil prices in 2019. Not only specifically in this year but all the time supply and oil demand play a significant role while deciding oil prices.
World Oil Trading Market In 2020
The next year after the 2019 prediction about the oil market was completely changed as compared to the price forecasts. Last year’s prediction was about the increase in the market prices of oil. But this year the situation completely changed and there was no oil price rise in the crude oil market. This trading market has also seen financial recession like other economies.
IEA Predicted The Drop-In Demand
This year the IEA changed its forecast about the oil market. Because the Brent oil was produced but their oil-producing countries were unable to export the whole production. Due to COVI-19, the situation was not good for this market. It was February 2020, when the major countries were already facing financial issues due to the covid-19 pandemic.
IEA predicted that there will be a drop in demand throughout the year. And this second prediction from IEA about the same year was true.
Pandemic Hit The Global Market
2020 was the year when the whole world was stuck due to COVID-19. In the initial months, only a few countries were seen covid cases and lockdown like situations. But after March month passed the whole world was completely shut down. Oil production was also impacted by it.
The most important thing that got impacted by it was Brent crude futures, oil stocks, oil reserves, etc. From OPEC countries to middle-east countries, and even an oil company was impacted.
Supply & Demand Issues Occurred
After the whole world was facing economic issues, supply and demand issues occurred in most of the commodity markets. Oil was also one among all these markets. There was less demand and more supply throughout the year.
World Oil Market In 2021
Now the year when all the countries of this world have seen pandemics has gone. Now it's 2021 and there are different situations for the oil market. This year there are more chances of recovery and this recovery process is believed to be continued till 2022. Let's see what is going to happen this year.
Positive Price Forecasts About Oil
At the beginning of the year, the second wave of the coronavirus came into existence and again it impacted the whole market. But still, the IEA announced positive forecasts for the oil market. There was an expectation of revival for this market due to increasing demand.
Oil Market Revived With Rising In Demand
As the whole world came back to track after the pandemic the oil market started reviving itself. Because the whole industries run by petroleum products started again, the oil market has seen a lot of demand. The first half of the year has seen a lot of growth in the oil demand.
The More Hike In Demand In The Rest Of The Year
Now the half of the year is passed and half is yet to be passed. But the forecast says that the demand for petrol or other oil products is going to increase continuously even after the year has passed completely.
Oil Prices Hiked Due To Demand
The prices of oil will also increase complying with the demand. More demand will push the whole oil industry towards more production. And as a result of it, the prices will go higher, because there will be no oversupply of oil.
Oil Market In 2022
There are expert predictions about the oil market for the next year too. The IEA and other oil authorities have predicted that the oil market won't only come back on track but also it will become a rising market.
IEA Prediction For Oil Market
IEA has predicted that the oil market will see a lot of demand in the next year. The oil demand will increase and go more than the pre-covid levels at the end of 2021. But after that the year 2022 will have a surplus demand.
OPEC Member Countries Move
OPEC member countries are moving forward toward more production. To fulfil all the requirements of oil all over the world, OPEC will install more infrastructure to make oil production more effective.
Summary - World Oil Demand
World oil demand is increasing every month and at the end of this year, the demand will be back to normal. Some experts are predicting that the oil market will be back to its pre-pandemic levels by 2022. But some of the experts and oil organizations are willing that the oil market will see more than the previous demand levels.
The oil market will be at boom with high dividends and yields on oil stocks and futures. There will be more demand and more production along with it there will be a huge hike in prices too.
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