A global energy watchdog anticipates a rise in gas-to-oil switching owing to high prices this winter, even as the outlook for demand remains bleak. Oil increased by almost 2 per cent on Wednesday, recovering from the day’s lows.

According to the International Energy Agency (IEA), the fourth quarter of the year will see a complete halt in global oil consumption due to the worsening economic slowdown and a failing Chinese economy.

The IEA also predicted significant switching from gas to oil for heating, estimating that it will occur at a rate of 700,000 barrels per day (BPD) on average from October 2022 to March 2023, which is double the rate from the previous year. The market was boosted by this as well as general prospects for sluggish supply growth. According to the IEA, observed global inventories decreased by 25.6 million barrels in July.

According to the most recent official data, the ongoing releases from the Strategic Petroleum Reserve (SPR) helped U.S. inventories rise last week. As 8.4 million barrels were released from the SPR as part of a programme that is set to terminate next month, commercial stocks increased by 2.4 million barrels.