Oil consumption could surge more than previously expected and reach record levels this year, a global energy watchdog said, as restrictions to combat the coronavirus ease faster than anticipated, global economic growth mounts and pent-up travel demand unfurls.

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The International Energy Agency (IEA), in its monthly oil outlook report on Friday, projected global oil demand would expand by 3.2 million b/d this year – up 800,000 b/d from a prior outlook – and reach 100.6 million b/d, on par with pre-pandemic highs.

IEA said global oil supply rose by 560,000 b/d to 98.7 million b/d in January, “but the uptrend was slowed by a chronic OPEC-plus under-performance versus targets,” potentially preventing supply/demand balance this year and supporting a nearly 20% jump in Brent...