Oil Surplus Looms if OPEC Hikes Supply
IEA Data Show
Global oil markets are poised to swing from a deficit to a surplus next quarter should OPEC increase output.
The International Energy Agency (IEA) said on Thursday that a surge in output by countries such as the US, Canada, Brazil, and Norway will outweigh demand growth in the coming months.
The IEA's latest medium-term outlook sees "comfortably supplied" oil markets to 2030, though it warns that unwavering demand growth could lead to a tightening of the market in the long term.
The IEA's forecast comes as OPEC and its allies are considering increasing production to meet rising demand. Saudi Arabia, the de facto leader of OPEC, has signaled that it is willing to pump more oil if necessary.
However, some analysts believe that OPEC may be reluctant to increase production too much, as it could lead to a drop in oil prices.
Here are some of the key findings from the IEA's latest report:
- Global oil demand is expected to grow by 1.3 million barrels per day (mbpd) in 2023, to 101.7 mbpd.
- Non-OPEC oil supply is expected to grow by 1.5 mbpd in 2023, to 64.9 mbpd.
- OPEC crude oil production is expected to average 28.5 mbpd in 2023, up from 27.8 mbpd in 2022.
- The global oil market is expected to be in surplus in 2023, with a surplus of 0.9 mbpd.
- The IEA expects the oil market to remain in surplus in the coming years, with a surplus of 2.1 mbpd in 2030.
The IEA's forecast is based on a number of assumptions, including that there is no major economic downturn, that OPEC continues to cooperate on production, and that there are no major disruptions to supply.
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