The agency expects global oil demand to rise by 1.5 million bpd in the second half of this year, compared with the first half, exceeding supply by 1.24 million bpd during that period. Photo Credit RN achieve
The extension of supply cuts by OPEC+ to the end of 2023 will lock in a substantial market deficit through the fourth quarter, the International Energy Agency (IEA) has said.
Global oil demand remains “on track” to grow by 2.2 million barrels per day to 101.8 million bpd this year, driven by a recovery in fuel demand in China, the world’s second-largest economy and top crude importer.
The agency said.“Unwinding cuts at the start of 2024 would shift the balance to a surplus. “From September onwards, the loss of Opec+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter,”
However, oil stocks will be at uncomfortably low levels, increasing the risk of another surge in volatility that would be in the interest of neither producers nor consumers.”
since Opec+ members Saudi Arabia and Russia said they would extend supply cuts of a combined 1.3 million bpd to the end of the year.
As part of their voluntary cuts, the kingdom is extending its million bpd output reduction until December while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
Despite sluggish economic growth, China is still on track to account for 75 per cent of the global crude demand growth this year, the agency said.
Writing by Julian Osamoto