Last month, the IEA downgraded its forecast for oil demand growth in 2021 to 5.4 mbd.

"World oil demand is expected to rebound by 5.5 mb/d in 2021 after contracting by 8.7 mb/d in 2020. Consumption appears to be slightly higher than expected in 1Q21, supported by cold weather in northern Asia, Europe and the US. A stronger economy and vaccine deployment will support growth in 2H21," the report read.

At the same time, the world oil supply in February fell by 2 mbd as the production in the United States was affected by the wave of extremely cold weather, the IEA noted.
"Global oil supply fell 2 mb/d in February to 91.6 mb/d after a cold snap shut in US production and Saudi Arabia made an extra cut of 1 mb/d. OPEC+ agreed to extend most of its cuts through April, with Saudi keeping its extra cut in place," the report read.

The IEA expects the US oil supply to decline by 180,000 barrels a day in 2021 as the shale oil producers remain under pressure from the last year's energy crisis.