Recent global events have sent the prices of oil and natural gas to record levels
According to the International Energy Agency (IEA), a global energy crunch is expected to kick up oil demand by 500.000 barrels per day, leading to an increase in inflation and slowing the global economic recovery.
In its monthly report, IEA stated: "Record coal and gas prices, as well as rolling blackouts, are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming."
The increase in demand in the past quarter was responsible for the biggest draw on oil products stocks in eight years. At the same time, the IEA estimates that OPEC+ will pump 700,000 barrels per day (BPD) below the estimated demand for crude oil in Q4 2021. Group's spare production capacity is set to shrink at a fast pace, from 9 million BPD in Q1 2022 to 4 million BPD in Q2.
After the Paris-based agency's outlook, now, all eyes will be on the US Energy Information Administration (EIA) report.
Sources: investing.com, reuters.com