Last month, the IEA also upgraded the forecast for world oil demand growth in 2021 by 0.1 mbd to 5.5 mbd.
"Our 2021 demand forecast now stands at 96.7 mb/d, an increase of 5.7 mb/d versus 2020 and roughly 200 kb/d higher than in last month’s Report. We have revised down our 1Q21 oil demand forecast by 200 kb/d to account for the deteriorating epidemic in Europe, but we have revised up our estimates for 2Q21 (+180 kb/d), 3Q21 (+520 kb/d) and 4Q21 (+325 kb/d)," the agency’s monthly Oil Market Report read.
The upgrade was largely driven by China and the United States, where consumption is expected to climb up this year, the agency noted.
At the same time, the IEA has revised down forecast for oil output growth outside the OPEC+ alliance in light of the remaining COVID-19 challenges.
"Due to these somewhat offsetting factors, the 2021 estimate for production for non-OPEC+ countries has been revised marginally lower. Output is now seen expanding by 610 kb/d in 2021 following a decline of 1.3 mb/d in 2020," the report read.
The IEA improved forecast for US oil supply fall this year and now expects the decline to stand at 100,000 barrels a day.
"For the United States, the world’s biggest oil producer, we now expect to see supplies ease by 100 kb/d in 2021 after falling by nearly 600 kb/d in 2020," the agency noted.