Rising gas prices benefit oil but…

LONDON, Aug 11 (Reuters) – Abnormally high summer temperatures and soaring gas prices have boosted the use of oil for power generation in recent months, the International Energy Agency said on Thursday. highlighting the risks associated with the global economic slowdown.

“The prices of natural gas and electricity have reached new records, which has prompted a switch from gas to oil in some countries”, explains the organization in its monthly report on the oil market, in which it notes its demand forecast for this year of 380,000 barrels per day (bpd).

“This extraordinary increase, very heavily concentrated in the Middle East and Europe, conceals relative weakness in other sectors,” she adds.

The IEA thus cites the reduction in the consumption of petroleum fuels in road transport in developed countries and the slowdown in growth expected between now and the end of the year, “in connection with a more negative economic sentiment which suggests a contraction considerable in the second half of 2022”.

Meanwhile, the report shows global oil supply surpassed pre-pandemic highs in July due to higher-than-expected Russian production.

Crude exports from Russia, at 7.4 million bpd, fell by 115,000 bpd last month, however. Since the start of the year, they have fallen by 600,000 bpd.

The IEA also notes that China has become the top destination for Russian oil exports, ahead of Europe for the first time.

(Report Noah Browning, French version Marc Angrand, edited by Kate Entringer)

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