IEA Forecasts Shift: Oil Supply Surges, Demand Stalls

The International Energy Agency has revised its oil supply growth forecast for the year upwards, citing increased production by the OPEC+ group, while lowering demand predictions due to weak global consumption. Despite this, non-OPEC producers are expected to lead the supply surge.

The International Energy Agency (IEA) has increased its projection for oil supply growth in response to OPEC+ producers deciding to hike production. In contrast, the agency has lowered its demand forecast due to weak consumption trends in major economies. In its recent monthly report, the IEA anticipates a global oil supply rise of 2.5 million barrels per day (bpd) by 2025, up from its previous estimate of 2.1 million bpd.

While the agency forecasts a mere rise of 680,000 bpd in world oil demand this year, down from an earlier prediction of 700,000 bpd, it underscores the ongoing tepid demand across major economies. The Paris-based body remarked that with consumer confidence still low, a turnaround in demand seems unlikely in the immediate future.

Following the IEA's report, oil prices experienced a brief decline. Despite the increased output from OPEC+, the IEA expects non-OPEC producers to continue leading world supply growth for this year and the next. Moreover, global oil refining is poised to hit an all-time high, nearing 85.6 million bpd by August, according to the agency.

(With inputs from agencies.)