Amid strong consumption in China and other regions, global oil demand has reached an unprecedented level, potentially driving up prices, as per the International Energy Agency (IEA).
In June, the world’s average fuel consumption hit a milestone of 103 million barrels daily and is anticipated to rise even more in August, the agency reported.
The oil landscape is becoming notably tighter as Saudi Arabia, along with its allies, decreases its output.
The IEA, headquartered in Paris, stated: “Driven by a robust demand for summer air travel, an increase in oil-based power generation, and a surge in Chinese petrochemical operations, we’re seeing peak oil demand levels.”
The agency further noted that there’s been a significant drawdown in “crude and product inventories”, expecting the market dynamics to get even tighter as we approach fall.
This week, Brent crude reached a six-month peak, surpassing $88 a barrel in London. This spike is attributed to the post-pandemic recovery in fuel consumption and production reductions by both Saudi Arabia and Russia.
However, the international benchmark has seen a minor decrease of 0.1% but remains above $86 as of today.
