LONDON (Reuters) - The energy watchdog warns a global energy crunch is likely to boost global oil demand by 500,000 barrels per day and that’s enough to stoke inflation and slow the economic recovery.
This red flag comes just days after the International Monetary Fund cuts its global economic outlook for the year, due in part to inflationary pressures.
Oil and natural gas prices have soared to multi-year highs recently, with crude oil in the $80 a barrel range on global markets Thursday.
Power prices are at record highs with widespread energy shortages hitting Asia and Europe.
Some countries have responded with rolling blackouts and that’s likely to stymie industrial activity - adding another ripple to the economic recovery.
The IEA upgraded its global oil demand forecast for this year and next, at a time when oil stockpiles in oil consuming nations are already at their lowest since early 2015.
Making matters worse: OPEC+ is in no rush to pump out more oil. Prompted to slash production last year in order to avoid a crash price during the health crisis, the group has only returned a fraction of that oil to the market... On Thursday, top oil producer Saudi Arabia dismissed calls for the OPEC+ to boost oil output even more.