The International Energy Agency (IEA) said it expects world oil demand to recover by 5.5 million barrels per day to 96.6 million this year

Progress in vaccinating the world against COVID-19 means the world’s economic recovery and demand for oil will outpace the output of top producers, the International Energy Agency (IEA) has said.

“The anticipated supply growth through the rest of this year comes nowhere close to matching our forecast for significantly stronger demand beyond the second quarter,” the IEA said in its monthly report, citing increased pumping from OPEC+ countries.

“But India’s COVID crisis is a reminder that the outlook for oil demand is mired in uncertainty. Until the pandemic is brought under control, market volatility is likely to persist.”

OPEC and its non-OPEC allies, an alliance sometimes referred to as OPEC+, cut oil production by a record amount in 2020 in an effort to support crude prices, as strict public health measures worldwide coincided with a fuel demand shock.

OPEC+ initially agreed to cut output by 9.7 million barrels per day, before easing cuts to 7.7 million and eventually scaling back further to 7.2 million from January. OPEC’s de facto leader Saudi Arabia has since said it plans to cut output by an extra 1 million barrels per day in February and March to stop inventories from building up.

Last week, OPEC kept its 2021 forecast for worldwide oil demand unchanged. The 13-member group anticipated demand growth to increase by 5.9 million barrels per day year on year to average 95.9 million.