IEA warns global oil supplies stretched despite forecast surplus
The IEA, which advises industrialised countries, expects global supply to rise by 2.1 million barrels per day this year, up 300,000 bpd from the previous forecast.
World demand will rise by just 700,000 bpd, it said, implying a sizeable surplus.
Despite making those changes, the IEA said rising refinery processing rates to meet summer travel and power-generation demand were tightening the market and the latest, accelerated supply hike from OPEC+ tomorrow had not had much effect.
'The decision by OPEC+ to further accelerate the unwinding of production cuts failed to move markets in a meaningful way given tighter fundamentals,' the agency said in a monthly report.
'Price indicators also point to a tighter physical oil market than suggested by the hefty surplus in our balances.'
The comments strike a similar tone to the message earlier this week from ministers and executives of OPEC nations and bosses of Western oil majors.
The output increases are not leading to higher inventories, which shows markets are thirsty for more oil, they said.
On Monday, when traders reacted to OPEC+'s decision, oil rose nearly 2 per cent towards US$70 a barrel, despite the larger than expected output hike and concerns about the impact of US tariffs.
It was trading near US$69 today.
As examples of price indicators suggesting a tighter market, the IEA cited strong refining margins and the premium at which oil for immediate delivery is trading to later supply, a structure known as backwardation.
'Prompt time spreads are in steep backwardation and refinery margins remain healthy despite implied stock builds,' it said.
Summer demand boost
Oil demand typically rises in the Northern Hemisphere summer as people fly and drive more on holidays.
Given rising seasonal demand, refinery crude processing rates will increase by 3.7 million bpd from May to August to meet Northern Hemisphere travel demand, the IEA said.
At the same time, a doubling in crude burning in refineries for power generation, typically to meet air conditioning needs, to around 900,000 bpd will further tighten the market, it said.
Nonetheless, the agency said this year's forecast for global demand growth of 700,000 bpd is the slowest since 2009, excluding 2020 when demand contracted due to the COVID pandemic.
The IEA said that, while it may be too early to say US tariffs are slowing demand, the largest declines in recent data were in countries in the 'crosshairs of the tariff turmoil,' citing China, Japan, South Korea, the United States and Mexico.
IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster energy transition than some other forecasters.
According to OPEC, demand will rise by 1.3 million bpd this year — almost double the IEA figure.
Next year, the IEA sees demand growth averaging 720,000 bpd, 20,000 bpd lower than previously thought, with supply growth rising by 1.3 million bpd, also implying a surplus. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
2 hours ago
- Malay Mail
Trump warns Russia to end Ukraine war in 50 days or face 100pc tariffs
WASHINGTON, July 15 — US President Donald Trump told Russia yesterday to end its Ukraine war within 50 days or face massive new economic sanctions, as he laid out plans for new infusions of weaponry for Kyiv via Nato. Trump said he was 'very, very unhappy' with Vladimir Putin, underlining his insistence that his patience had finally snapped with the Russian leader's refusal to end the deadly conflict. 'We're going to be doing very severe tariffs if we don't have a deal in 50 days, tariffs at about 100 pe rcent,' Trump said during an Oval Office meeting with Nato Secretary General Mark Rutte. The Republican added that they would be 'secondary tariffs' that target Russia's remaining trade partners—seeking to cripple Moscow's ability to survive already sweeping Western sanctions. Russia's top trading partner last year was China, accounting for about 34 percent, followed distantly by India, Turkey and Belarus, according to the Russian Federal Customs Service. Trump and Rutte also unveiled a deal under which the NATO military alliance would buy billions of dollars of arms from the United States—including Patriot anti-missile batteries—and then send them to Ukraine. 'This is really big,' said Rutte, as he touted a deal aimed at easing Trump's long-held complaints that the US is paying more than European and Nato allies to aid Ukraine. Germany, Canada, Denmark, Finland, the Netherlands, Norway, Sweden and Britain were among the buyers helping Ukraine, added the Nato chief. 'If I was Vladimir Putin today and heard you speaking... I would reconsider that I should take negotiations about Ukraine more seriously,' said Rutte. Ukrainian President Volodymyr Zelensky announced he had spoken with Trump and was 'grateful' for the arms deal. 'Very long time' German Chancellor Friedrich Merz said Berlin would play a 'decisive role' in the new weapons plan. But EU foreign policy chief Kaja Kallas said Trump's sanctions deadline was too far into the future. 'Fifty days is a very long time if we see that they are killing innocent civilians every day,' she said. Trump attempted a rapprochement with Putin shortly after starting his second term, having campaigned on a pledge to end the Ukraine war within 24 hours. His pivot towards Putin sparked fears in Kyiv that he was about to sell out Ukraine, especially after Trump and his team berated Zelensky in the Oval Office on February 28. But in recent weeks Trump has shown increasing frustration with Putin, as the Russian leader stepped up missile and drone attacks to record levels instead of halting his invasion. Washington has also U-turned from an announcement earlier this month that it would pause some arms deliveries to Kyiv. Trump said his wife Melania had helped change his thinking about Putin, a man for whom he formerly expressed admiration. 'I go home, I tell the First Lady, 'you know, I spoke to Vladimir today, we had a wonderful conversation,'' Trump said. 'And she said, 'Oh really? Another city was just hit.'' He added of Putin: 'I don't want to say he's an assassin, but he's a tough guy.' Better late than never US Republican Senator Lindsey Graham and Democratic Senator Richard Blumenthal, who are pushing a bipartisan bill on Russia secondary sanctions, praised Trump's 'powerful' move. 'The ultimate hammer to bring about the end of this war will be tariffs against countries, like China, India and Brazil, that prop up Putin's war machine,' they said in a statement. Trump's special envoy Keith Kellogg arrived in Kyiv on Monday for what Zelensky called a 'productive meeting.' One Ukrainian soldier deployed in the war-scarred east of the country, who identified himself by his call sign Grizzly, welcomed Trump's promise of fresh air defense systems. 'Better late than never,' the 29-year-old told AFP. Russian forces meanwhile said on Monday they had captured new territory in eastern Ukraine with the seizure of one village in the Donetsk region and another in the Zaporizhzhia region. Its forces also killed at least three civilians in the eastern Kharkiv and Sumy regions on Monday, Ukrainian officials said. In Kyiv, Zelensky also proposed a major political shake-up, recommending economy minister Yulia Svyrydenko take over new prime minister, and appointing current premier Prime Minister Denys Shmygal as defense minister. — AFP
Malay Mail
3 hours ago
- Malay Mail
COUNTRY & SECTOR RISKS - June 2025 The great leap backwards: 23 sectors and 4 countries downgraded
US tariffs, even if paused or reduced, have already reached historically high levels Nearly 80% of advanced economies recorded an increase in defaults in the first quarter of 2025 compared to 2024 The metal sector is the most affected, and traditional industrial sectors (automotive and chemicals) are under pressure. Other sectors that have been downgraded include: In the United States, information and communication technologies and retail In China, textiles and clothing, impacted by customs duties. The US economy faces two uncertainties: the size of customs tariffs and how they will be absorbed by the economy. Despite declining consumer confidence, employment is holding up and the contraction in GDP (-0.2% in Q1) is a reflection of preventive stockpiling by businesses. In Europe, Germany saw a minor uptick in growth in the first quarter, France remains sluggish, Italy could run out of steam, while Spain continues to benefit from tourism and European funds to maintain momentum. HONG KONG SAR / SHANGHAI & BEIJING, CHINA / TAIPEI, TAIWAN / SYDNEY, AUSTRALIA / TOKYO, JAPAN - Media OutReach Newswire - 15 July 2025 - In a context of unprecedented geopolitical and trade uncertainty, the global economy is navigating between an expected slowdown and escalation risks. Trump's tariff decisions and tensions in the Middle East are reshaping an unpredictable economic landscape for this environment, and in view of the measures already in place, Coface has downgraded 23 sectors and 4 global economic outlook is more uncertain than ever, as it depends heavily on (geo)political events and the trade decisions of the US President. The reintroduction of tariffs after the 90-day suspension periods (9 July for the rest of the world, 12 August for China) could have a significant impact on global growth. A marked slowdown is expected (growth in 2025 andin 2026), with mainly downside risks – growth ofcannot be ruled out if the geopolitical and trade situations same uncertainty naturally surrounds inflation, whose current stability could be jeopardised. It could reachin the US by the end of 2025, with broader upside risks subsisting in the event of higher energy prices. The major central banks are likely to respond with a continued cautious stance. However, if US inflation is brought under control, the Fed could cut rates as early as the autumn of 2025. The ECB has announced that it will maintain its rate-cutting policy, but added that it is close to its terminal is all the greater in Europe as long-delayed fiscal consolidation policies could finally begin to be implemented, while Germany is engaged in a stimulus programme whose scale is difficult to assess at this Israel-Iran conflict has reigniting fears over oil. A disruption or even a blockade of the Strait of Hormuz (the passage forof global supply) could push prices aboveper barrel. Excluding this geopolitical environment, however, fundamentals point to a fall in prices on back of production increases in non-OPEC+ countries, demand weakened by trade tensions and the reintroduction of volumes by OPEC+ members (2.2 million barrels per day). Barring a major crisis, prices should continue to be extremely volatile but remain within a range of $65 to $75 per China, the temporary truce on tariffs has led to a surge in exports, but the outlook is fragile. India, despite generating growth of more thanin the first quarter, is seeing consumption slow and its fiscal headroom Latin America, Mexico is bearing the brunt of trade uncertainty, with zero growth expected in 2025. Brazil, after a rebound in agriculture following El Niño-induced losses, is expected to contract on back of restrictive monetary policy (key rate raised to). In Argentina, the momentum generated by Mileinomics is strong and, despite its low foreign exchange reserves, could post GDP growth ofandThe metallurgy sector is experiencing a major crisis, having recorded global steel overcapacity ofin 2024, which representsof global production. The unfavourable macroeconomic environment, energy tensions and new steel tariffs are exacerbating the situation for steelmakers, particularly in Canada, Mexico and its exports headed for the US, Canada is one of the countries most exposed to the trade war. Growth has slowed significantly after a surge at the end of 2024. Consumption is falling, investment is weakening and unemployment stands at, its highest level since boosted by the menace of customs duties, contracted sharply in April. The, which were hit by tariff increases of up to 50%, have been particularly affected. The upcoming revision of the USMCA agreement, which is expected to be brought forward to the end of 2025, could further exacerbate the country's economic the full study here Hashtag: #Coface The issuer is solely responsible for the content of this announcement. COFACE: FOR TRADE As a global leading player in trade credit risk management for almost 80 years, Coface helps companies grow and navigate in an uncertain and volatile environment. Whatever their size, location or sector, Coface provides 100,000 clients across some 200 markets. with a full range of solutions: Trade Credit Insurance, Business Information, Debt Collection, Single Risk insurance, Surety Bonds, Factoring. Every day, Coface leverages its unique expertise and cutting-edge technology to make trade happen, in both domestic and export markets. In 2024, Coface employed +5,200 people and recorded a turnover of ~€1.845 billion.
Free Malaysia Today
6 hours ago
- Free Malaysia Today
US$10mil bag: original Birkin smashes records at auction
The original Birkin crafted for celebrity Jane Birkin, 1985. (Sotheby's pic) PARIS : The first-ever Birkin bag designed by French luxury brand Hermes for celebrity Jane Birkin sold for 8.58 million euros at a Sotheby's auction in Paris on Thursday, smashing previous price records for a handbag. The modern design classic, owned by a Paris-based handbag collector, sparked a telephone bidding war up to seven million euros, with the final sale price set at 8.58 million with commission and fees, the Sotheby's website showed. 'After weeks of anticipation, the bidding opened at 1 million euros – prompting a gasp from the room,' Sotheby's said in a statement. The final buyer, who eclipsed eight other rivals, was a 'private collector from Japan', the auction house added, without giving further details. The previous record price for a handbag at auction was set by a diamond-encrusted crocodile skin Hermes Kelly 28, which fetched US$513,000 in 2021 at Christie's in Hong Kong. Sotheby's had advised that the Birkin prototype was expected to beat that level during its sale. But the staggering price tag for a well-worn item is in keeping with the fashion world's recent flashy aesthetics. After years of so-called 'quiet luxury' dominating catwalks, designers have embraced more ostentatious looks in recent seasons that have been dubbed 'boom boom' by some trend forecasters. Modern-day Birkin bags are offered by Hermes to loyal clients, with prices starting at around US$10,000. 'Nostalgic' The original Birkin has changed hands twice since being put up for sale by Birkin at an auction in 1994 where the proceeds went to an AIDS charity, according to Sotheby's. Thursday's sale represents an extraordinary pay day for owner Catherine Benier, who has a boutique in the upmarket 6th district in Left Bank Paris. She said she was 'astonished at the result' in a statement sent by Sotheby's. 'I'm already very nostalgic at the thought of knowing the bag is no longer mine but extremely happy it has found a new loving home,' she added. She told The New York Times before the sale that the bag, which she bought at auction 25 years ago, was the 'jewel in my collection'. The bag is now the second-most expensive fashion item ever sold at auction, Sotheby's said. The record was established by a pair of ruby red slippers worn by actor Judy Garland from The Wizard of Oz in 1939, which sold for US$32.5 million in 2024 in Dallas, Texas. 'Many years of use' The birth of the Birkin bag has become a modern fashion legend. During a Paris-London flight, the singer and film star – who died in 2023 – complained to fellow traveller Jean-Louis Dumas, then head of Hermes, about not being able to find a bag suited to her needs as a young mother. The result of their conversation was a spacious tote with room for baby bottles, created in 1984 and named the Birkin. The prototype, which Birkin regularly carried with her and customised with stickers, is engraved with the initials J.B. and has several unique features, including closed metal rings, a non-detachable shoulder strap and a built-in nail clipper. Its condition 'reflects the many years of use by the actress and singer', Sotheby's said beforehand. A slightly differently sized version of the original has become the flagship product of the immensely profitable family-owned Hermes ever since. Produced in very limited numbers, the bag has maintained an aura of exclusivity and is beloved by celebrities from the Kardashians, Jennifer Lopez to Victoria Beckham. Frustrated fashionistas in America even sued Hermes in a class-action suit in California last year after they were refused access to the bags. Birkin had a sometimes strained relationship with Hermes, once threatening to take her name off the bags because of the group's treatment of crocodiles whose skins are used for its products. The former wife of French singing legend Serge Gainsbourg championed a host of causes, including animal rights.
