The increase means that the IEA, which acts as an energy watchdog for wealthy countries in the Organization for Economic Co-operation and Development, expects global thirst for crude next year to exceed levels before the pandemic to 99.6 million barrels per day.

Oil prices added to early gains on Thursday after the release of the IEA report, with Brent crude rising 1.2% to $ 84.16 a barrel early in trading. U.S. crude futures rose 1.1% to $ 81.35 a barrel, on course to close at new seven-year highs. Both benchmarks have risen more than 60% this year, accelerating in recent months in part due to tight supply elsewhere in the energy market.

“An acute shortage of natural gas, [liquefied natural gas] and the supply of coal resulting from the global economic recovery has triggered a surge in energy supply prices and triggered a massive shift to petroleum products and the direct use of crude for power generation, ”he said. the Paris-based organization said in its report, adding that power plants, fertilizer producers, manufacturing operations and refineries are all affected.

The shortage of relatively low-carbon but expensive natural gas – analysts say the product is two to three times more expensive than the equivalent amount of oil – and the tendency to shift to more emission-intensive fuels such as Raw Products comes weeks before leaders from around the world descend on Glasgow for UN-led climate talks.

Analysts say the IEA’s forecast of an additional 500,000 barrels per day demand due to the energy crisis could be cautious.

“We’ve never had a situation like this where oil is extremely cheap [versus gas] so we just don’t have empirical evidence ”of increasing demand for oil, said Bjarne Schieldrop, chief commodities analyst at SEB Markets. “It could very well be over a million barrels,” he added.

Relatively low natural gas stocks for the time of year and low wind levels in Europe have coincided with the post-pandemic economic recovery, coal shortages in China and the possibility of a cold winter in the hemisphere. north to drive up fossil fuel prices. Benchmark gas prices in Europe have jumped 184% in the past three months.

IEA Executive Director Fatih Birol said on Wednesday that extreme weather events, such as Hurricane Ida in the Gulf of Mexico, droughts hampering hydroelectric power in China and Brazil, and widespread flooding, have also contributed to the energy crisis. He added that supply bottlenecks, including maintenance work delayed by the pandemic, meant natural gas outages are currently 40% higher than average.

As a result, analysts have already seen an increase in the trend known as gas-to-oil switching, where power plants that run on petroleum are turned on or those that can be converted to run on crude products are switched. Goldman Sachs cited this when upping its oil price forecast at the end of last month, while energy consultancy Rystad Energy said it expects the Asian energy sector to use 400,000 barrels of oil. more oil per day than over the next six months.

In its report, the IEA observed a similar trend, citing provisional data showing “unusually high demand for fuel oil, crude oil and middle distillates for power plants” in China, Japan, Germany, France and the United States. Brazil.

Despite this, the supply of oil-producing countries remains limited. The IEA has cut its supply forecast for this year and next for countries outside the Organization of the Petroleum Exporting Countries and its allies, citing outages due to Hurricane Ida and related outages maintenance in Canada and Norway.

Meanwhile, despite the increase in OPEC + production, the IEA said the alliance would produce 700,000 barrels per day less than the world’s appetite for its crude in the fourth quarter of 2021, but added that if the producer group continued to reduce its production restrictions, it could return to supplying more than needed in 2022.

Long-term reports released in recent weeks by OPEC and the IEA have shed light on the cartel’s influence on the global energy system. While the IEA said on Wednesday that clean energy spending must triple to avoid further turmoil in the electricity market, the OPEC report says population growth in developing countries and aversion of The richest countries for fossil fuels leave the cartel well positioned to profit from the sale of oil for decades to come.

Write to David Hodari at [email protected]