PARIS: Global oil demand will rise more than previously forecast this year as heatwaves and soaring gas prices are prompting countries to switch fuels for power generation, the International Energy Agency said on Thursday.

Oil prices have dropped by $30 per barrel from a peak in June due to growing supplies and “escalating concerns over the deteriorating economic outlook”, the Paris-based agency said in a monthly report.

Meanwhile, prices of natural gas and electricity have jumped to new records, prompting some countries to switch to oil use, the IEA said.

“With several regions experiencing blazing heatwaves, the latest data confirm increased oil burn in power generation, especially in Europe and the Middle East but also across Asia,” the agency said.

“Fuel switching is also taking place in European industry, including refining,” said the IEA, which advises developed countries on energy policy.

Consequently, the IEA raised its demand growth forecast by 380,000 barrels per day.

Demand is now seen rising by 2.1 million bpd to a total of 99.7 million bpd in 2022. It will reach 101.8 million bpd in 2023, exceeding pre-Covid levels.

Published in Dawn, August 12th, 2022