By David Hodari
Soaring prices for natural gas and coal have forced power companies and manufacturers to switch to using oil, according to the International Energy Agency, which could add 500,000 barrels a day to global demand. There is sex.
In a closely monitored monthly market report, the IEA increased its global oil demand forecasts this year and next by 170,000 barrels and 210,000 barrels per day, respectively, but the cumulative impact of the ongoing energy crisis. Added that it could be just as big, 500,000 barrels a day from September to the first quarter of next year.
This increase means that the IEA, which acts as an energy watchdog for the wealthy nations of the Organization for Economic Co-operation and Development, expects the world’s thirst for crude oil to exceed pre-pandemic levels next year.
“Serious shortage of natural gas, [liquefied natural gas] And the coal supply resulting from the rising global economic recovery has caused a sharp rise in the price of energy supplies, causing a major switch to petroleum products and the direct use of crude oil for power generation, “Paris said. The organization based in said in the report. In addition, power plants, fertilizer producers, manufacturers and refineries are all affected.
Crude prices on Thursday reversed the modest loss from Wednesday, with Brent crude rising 0.9% in early trading to $ 83.93 a barrel. US crude oil futures will also rise 0.9% to $ 81.14 a barrel, closing at the highest price in seven years. Both benchmarks have risen by more than 60% this year, and these rises have accelerated in recent months, partly due to tight supply elsewhere in the energy market.
Relatively weak natural gas inventories throughout the year and low wind speeds in Europe are consistent with post-pandemic economic recovery, coal shortages in China, and the potential for fossil fuel prices to skyrocket in the cold winters of the Northern Hemisphere. Benchmark Europe’s gas prices have risen 184% in the last three months.
IEA Secretary-General Fatibirol said Wednesday that extreme weather events such as the Gulf of Mexico hurricane Aida, the droughts that disrupt hydropower in China and Brazil, and widespread floods also contributed to the energy crisis. He added that supply chokepoints, including delayed maintenance of the pandemic, mean that natural gas outages are now 40% more than average.
As a result, analysts have already observed an increase in the trend known as the switch from gas to oil. This will start a power plant that runs on oil or switch power plants that can be converted to run on crude oil. Goldman Sachs quoted this in a rise in oil price forecasts at the end of last month, and energy consultant Listad Energy said Asia’s electricity sector will use 400,000 barrels more oil a day in the next six months. He said he was expecting it.
The IEA report observes similar trends, citing interim data showing “high unseasonable demand for fuel oils, crude oil and intermediate fractions for power plants” in China, Japan, Germany, France and Brazil. bottom.
Nevertheless, supply from oil-producing countries is still constrained. The IEA has adjusted supply forecasts for this year and next year for countries other than OPEC and its allies due to the suspension by Hurricane Ida and the maintenance-related suspension in Canada and Norway.
Meanwhile, despite increased production from OPEC +, the IEA states that the alliance will produce 700,000 barrels per day more than the world’s desire for crude oil in the fourth quarter of 2021. As the group continues to ease production restraints, it will shift back to more supply than necessary in 2022.
Long-term reports from OPEC and the IEA over the past few weeks have highlighted OPEC’s impact on the global energy system. The IEA said Wednesday that clean energy spending needs to be tripled to avoid further turmoil in the electricity market, but OPEC’s report reports on population growth in developing countries and fossil fuels in rich countries. He said the cartel was in a position to benefit from the sale of oil because of his hatred. The next few decades.
Write to David Hodari at email@example.com
Gas shortages have forced power plants to switch to oil, increasing demand, the IEA said.
Source link Gas shortages have forced power plants to switch to oil, increasing demand, the IEA said.
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