IEA says oil demand more resilient than expected in the face of Omicron

(Bloomberg) --Global oil demand has proven stronger than expected as the latest coronavirus variant inflicts a softer hit to the economy than anticipated, the International Energy Agency said.

“Demand dynamics are stronger than many of the market observers had thought, mainly due to the milder Omicron expectations,” IEA Executive Director Fatih Birol said on a call with reporters on Wednesday.

Crude prices have rallied this year, pushing further above $80 a barrel in London, as fuel use proves resilient while supplies suffer a range of setbacks from North America to Libya and Kazakhstan.

“We see some of the key producers including Nigeria, Libya and also Ecuador that have serious supply disruptions,” Birol said.

In its latest monthly report, the Paris-based agency forecast that world fuel consumption would slide by 740,000 barrels a day this quarter, compared with the preceding three months, as the new virus outbreak added to the typical seasonal slowdown in demand.

Birol didn’t specify whether the institution would revise this forecast. It is scheduled to publish its next monthly report on Jan. 19.