IEA: Switching from natural gas boosts oil demand

High summer temperatures and rising gas prices have boosted the use of oil for power generation, boosting demand but masking weaknesses in economies beset by recession fears, the International Energy Agency (IEA) said on Thursday.

The Paris-based agency said in its monthly oil report, in which it raised its forecast for demand in 2022 by 380,000 barrels per day, that natural gas and electricity prices rose to new records, stimulating the shift from gas to oil in some cases, Reuters reported.

The agency warned that “these exceptional gains, which are largely concentrated in the Middle East and Europe, mask relative weakness in other sectors,” noting the decline in fuel use in road transport in developed countries and a slowdown in growth by the end of the year.