[1/2]A photo showing an oil pump jack on the outskirts of Almetyevsk, Republic of Tatarstan, Russia, June 4, 2023.Reuters/Alexander Manjuk/File Photo
LONDON, Aug 11 (Reuters) – The International Energy Agency (IEA) said on Friday that cuts in OPEC+ supply will reduce oil inventories for the rest of the year and economic headwinds will limit global demand growth in 2024. Prior to the release, it announced that prices could rise further.
Tight supplies and rising global demand due to production cuts by OPEC and its allies (known as OPEC+) have supported higher oil prices, with Brent crude reaching a high above $88 a barrel on Thursday,1 It hit a record high for the month.
The IEA warns that if current OPEC+ targets are maintained, crude oil inventories could drop by 2.2 million barrels per day in the third quarter and by 1.2 million barrels per day in the fourth quarter. There is a risk of further increases,” he said.
“Deepening OPEC+ supply cuts collided with improving macroeconomic sentiment and record global oil demand,” the Paris-based energy watchdog said in its monthly oil market report.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies will begin curbing supplies at the end of 2022 and extend them to 2024 in June to revive the market.
The IEA said global oil supplies fell by 910,000 barrels per day in July, partly due to a sharp cut in Saudi production. But Russia’s oil exports stabilized at about 7.3 million barrels per day in July, according to the IEA.
The IEA expects demand growth to slow sharply to 1 million barrels per day next year, citing lackluster macroeconomic conditions, a waning post-pandemic recovery and a surge in the use of electric vehicles. said that
“The post-pandemic recovery is nearly complete, with oil consumption growth slowing significantly as multiple headwinds challenge the OECD’s outlook,” the IEA said, citing Organization for Economic Co-operation and Development countries.
The IEA’s demand growth forecast is down 150,000 barrels per day from last month, contrasting with OPEC’s forecast, which said Thursday that oil demand in 2024 will rise significantly above 2.25 million barrels per day. maintained.
“The outlook for the global economy remains grim in the face of rising interest rates and tight bank credit,” the IEA said in a statement.
As for 2023, the IEA and OPEC are not far apart.
The IEA expects demand to grow by 2.2 million barrels per day in 2023 due to summer air travel, increased oil use in power generation and a surge in Chinese petrochemical activity. OPEC expects an increase of 2.44 million barrels per day.
Demand is expected to average 102.2 million barrels per day this year, with China accounting for more than 70 percent of growth, according to the IEA, despite concerns over the economic health of the world’s largest oil importer. .
Reported in London by Natalie Glover and Alex Lawler. Editing: Alex Lawler, Jason Neely, David Evans
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