The International Energy Agency has announced that global oil demand will grow more than expected this year due to heat waves and high gas prices.
The Paris-based agency said in a monthly report that oil prices have fallen $30 a barrel since peaking in June due to higher supplies and “increasing concerns about a worsening economic outlook.”
Meanwhile, natural gas and electricity prices rose to new records, prompting some countries to switch to oil, the agency said.
“With many regions prone to extreme heat, the latest data confirms an increase in the use of oil for electricity generation, especially in Europe and the Middle East, as well as throughout Asia,” the agency said in a report.
“The shift in fuel use is also happening in European industry, including oil refining,” the agency, which advises developed countries on energy policy, said in a statement.
As a result, the International Energy Agency raised its demand forecast by 380,000 barrels per day.
Demand is now expected to grow by 2.1 million bpd to reach a total of 99.7 million bpd in 2022.
It says demand will reach 101.8 million barrels per day in 2023, higher than pre-pandemic levels.
The International Energy Agency noted that oil supplies to Europe are spurred on by “exceptional demand” for heat and power and industry.
The report comes after the European Union’s plan to cut gas consumption in all 27 member countries by 15 percent came into effect on Tuesday.
She explained that heatwaves and the start of what could be a significant increase in the switch from gas to oil under new European Union guidelines in response to uncertainty around gas supplies from Russia is an increase in the use of fuel and diesel.
Source: AFP.