Switch from gas increases oil need, however financial headwinds loom– IEA

Switch from gas boosts oil demand, but economic headwinds loom — IEA

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Speaking to CNBC on Monday, the executive director of the International Energy Agency discussed the complexities of the energy shift and the contending obstacles that will require to be stabilized in the years ahead.

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Sweltering summer season temperature levels and skyrocketing gas rates have actually increased making use of oil in power generation, the International Energy Agency (IEA) stated on Thursday, increasing need however masking weak point in
economies besieged by economic crisis worries.

“Natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries,” the Paris- based company stated in its regular monthly oil report in which it raised its outlook for 2022 need by 380,000 barrels daily (bpd).

“These extraordinary gains, overwhelmingly concentrated in the Middle East and Europe, mask relative weakness in other sectors,” the IEA cautioned.

It pointed out lowered usage of fuels for roadway transportation in industrialized nations and slowing development by the year’s end “aligning with more negative economic sentiment to suggest a considerable 2H22 contraction”.

Meanwhile international oil supply in July broke previous pre-pandemic highs, buoyed by higher-than-expected output by Russia, whose exports the IEA stated fell by 115,000 bpd in July to 7.4 million bpd – a decrease of simply 600,000 bpd from the start of the year.

Russian oil export profits were down $2 billion in July to $19 billion mainly due to the fact that of lower rates, and the IEA flagged that China overtook Europe for the very first time as the primary location for Russia’s crude.

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