U.S. and Canadian oil consumption is expected to increase during the next two years but will not regain all the ground lost in 2020, says ATB Financial.
U.S. consumption in 2022 is forecast to be 0.6 per cent below its 2019 level. Canada’s is expected to be 3.1 per cent lower, says an ATB economic update.
Average annual global oil consumption will rise by 5.5 million barrels per day in 2021 compared to last year, according to the Short-Term Energy Outlook released by the U.S. Energy Information Administration (EIA) earlier this week.
The rebound is not, however, enough to get back to the pre-pandemic level, with global consumption still down by 3.5 million barrels per day compared with 2019.
Global consumption will return to pre-pandemic levels in 2022.
“Consumption is, of course, only one side of the equation. Fortunately, the EIA is also forecasting a balanced market with supply roughly in line with demand over the next two years,” says ATB.
“The supply forecast is hanging by a thread held by OPEC. If the cartel holds fast and does not flood the market, prices should stay relatively strong.”
The other wild card is the path of the pandemic and its impact on demand. The forecast assumes strong GDP growth in the U.S. and the continued reopening of the global economy as vaccination levels increase.