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Yahoo
6 days ago
- Business
- Yahoo
Oil Prices Inch Lower As IEA Cuts Demand Forecast, Warns of Looming Glut
The oil market could be even more oversupplied at the end of this year than previously expected amid tepid demand growth and surging supply from both OPEC+ and non-OPEC+ producers, the International Energy Agency (IEA) said on Wednesday. Global oil demand is now expected to rise by just 680,000 barrels per day (bpd) this year, and by 700,000 bpd in 2026, to reach 104.4 million bpd next year, the IEA said in its monthly Oil Market Report out today. The latest forecasts are a downward revision of 20,000 bpd in demand growth estimates from the July report—the fifth consecutive from the agency, which has slashed its projection for the 2025 oil demand growth by a combined 350,000 bpd since the beginning of the year. The latest downgrade reflects 'lacklustre demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote,' the IEA said. Consumption in emerging and developing economies has been weaker than expected, with China, Brazil, Egypt and India all revised down compared with last month's report, the Paris-based agency noted. The only bright spot in demand has been jet fuel demand, which is on track to increase by 2.1% this year, the strongest of any product, said the IEA. But the agency noted that the overall projected jet fuel consumption of 7.7 million bpd in 2025 would still be about 180,000 bpd lower compared to the 2019 pre-Covid level. While the IEA downgraded its demand growth estimate, again, it hiked its global supply growth forecast by 370,000 bpd to 2.5 million bpd this year, after the eight OPEC+ members agreed earlier in August to boost output by 547,000 bpd in September, fully unwinding their 2.2 million bpd cuts agreed to in November 2023. The IEA said that sanctions on Russia and Iran could curb supplies from these producers, but noted that 'oil market balances look ever more bloated as forecast supply far eclipses demand towards year-end and in 2026.' As usual, the IEA is much more bearish on oil demand growth than OPEC, which said in its own report on Tuesday that demand in 2026 is set to strengthen on the back of expected stronger economies in key oil-consuming regions. By Michael Kern for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-07-2025
- Business
- Yahoo
IEA Sees Oil Supply Outpacing Demand Despite Tight Summer Market
Global oil supply growth is expected to materially exceed demand growth this year despite the tight market balance in the peak summer consumption season, the International Energy Agency (IEA) said in its monthly report on Friday. Following OPEC+'s supersized production hike for August, the IEA revised up its estimate of global oil supply growth to 2.1 million barrels per day (bpd) for 2025 in its Oil Market Report for July, up by 300,000 bpd from last month's projection of 1.8 million bpd growth. At the same time, global oil demand is expected to increase by less than 1 million bpd in 2025, according to the agency, which cut its demand growth projection by 20,000 bpd compared to the June report. World oil demand growth is forecast to rise by just 700,000 bpd in 2025, its lowest rate since 2009, with the exception of the 2020 Covid year, according to the agency. But the market glut has not materialized yet, the IEA says, as it sees increasing demand in the summer that is tightening the market. 'Price indicators also point to a tighter physical oil market than suggested by the hefty surplus in our balances,' the agency said in the report. 'Prompt time spreads are in steep backwardation and refinery margins remain healthy despite implied stock builds of 1.74 mb/d in 2Q25.' Last weekend, the OPEC+ producers surprised market analysts again with the size of the increase for August, which was bigger than expected - at 548,000 bpd versus 411,000 bpd expected. OPEC+ continues to rely on strong summer oil demand to absorb the additional barrels. The physical market appears to be tight in the near term, although the coming glut in the autumn and beyond is likely to push oil prices down from current levels. Oil prices didn't collapse following last weekend's OPEC+ decision—a sign that there isn't immediate fear of oversupply and that the market hasn't shaken off entirely geopolitics-driven volatility. By Tsvetana Paraskova for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-06-2025
- Automotive
- Yahoo
Why Forecasters Can't Agree On When Oil Demand Will Peak
Oil demand is set to plateau rather than drop off a cliff after it peaks, the International Energy Agency (IEA) predicted this week, citing 'policy settings and market trends.' But here's the thing about policy settings and market trends: they change. That oil demand is set to peak before 2030 has been repeated ad nauseam by various forecasters, including, notably, Chinese energy majors Sinopec and CNPC. Indeed, OPEC is the only forecaster of demand that does not see it peaking anytime soon. Of course, OPEC is interested in its predictions panning out—but so is the IEA, a vocal proponent of the shift to electrification in transport and moving from hydrocarbon-fueled baseload generation to weather-dependent wind and solar, as are many governments of large oil consumers. When the IEA cited those 'policy settings and market trends' in its latest Oil Market Report and its Oil 2025 report, which came out together this week, it was that shift to EVs and the move to wind and solar that it meant as drivers of falling oil demand. But there are some challenges facing both assumptions. A recent Shell-commissioned survey found that while existing EV owners tend to feel more confident about their vehicles, many prospective buyers remain hesitant—citing cost as a major barrier. 'While current EV drivers are feeling more confident, the relatively high cost of owning an electric vehicle, combined with broader economic pressures, are making it a difficult decision for new consumers,' Shell's VP for mobility and convenience, David Bunch, said, as quoted by Bloomberg this week. China remains an exception, thanks to extensive subsidies and a highly competitive market that has driven down prices. However, even in China, this model may be reaching its limits. 'It's very extreme, tough competition,' an executive vice president of BYD told Bloomberg. 'No, it's not sustainable,' Stella Li added, referring to the current situation in China's electric car sector. The most likely prospect is consolidation. And that may put a stop to the continuous decline in prices. Despite this, many oil demand forecasts—including the IEA's—still rely on projections of steady EV growth. But recent industry decisions suggest a more complex picture. GM announced it would invest $4 billion in expanding internal combustion engine vehicle production. Volvo Cars, which reported strong EV-driven sales last year, saw a 12% drop in overall sales this May, in part due to underperformance in its EV segment. These developments reflect growing pains in the transition—not necessarily a reversal, but perhaps a recalibration of expectations. If one of the largest U.S. automakers is tempering its EV ambitions, it raises the question: how many others might adjust course, especially if EV profitability continues to lag behind that of ICE vehicles? Then there is the issue of 'policy settings.' In this respect, Europe is perhaps the best example of trying to go against nature and suffering adverse consequences. Here, we have the European Union's and the UK's leadership bent on having an energy transition whether anyone wants it or not, up to and including, in the UK's case, decimating local oil and gas production in favor of imports of both, plus electricity. In the EU, the leadership is discussing a ban on any oil products that may have been produced from Russian crude oil—when the EU is a major importer of oil derivatives from Asia, which in turn features the two biggest buyers of Russian crude, China and India. The IEA and most other forecasters are quite certain that this sort of energy policy would ultimately lead to lower oil demand. That's despite the fact that the UK's extremely pro-transition government conceded the country still needs North Sea oil and gas so they limited their efforts to ban it to new exploration only. It's also despite the fact that Austria has joined Slovakia and Hungary in opposing a total ban on Russian gas imports—after the EU booked a record in LNG imports from Russia last year. However, on the ground, as it were, reality keeps shattering these visions, and oil demand remains strong. Naturally, economic trends and events such as inflation and tariffs affect demand negatively when they go up. This has always been the case and always will be, when it comes to oil. But the fact that prices surged immediately after Israel launched missiles at Iran last Friday shows quite clearly that the world is still as hooked on crude as it has been for a century. One might argue that it was a knee-jerk reaction on the part of traders given that Iran is the third-largest crude producer in OPEC with over 3 million bpd in output. One might extend this argument to include OPEC's oft-cited spare capacity that amounts to some 5 million bpd. However, a counter-argument could also be made, namely, that prices rose because the market is not as oversupplied as assumed and that it can very quickly stop being well supplied at all. As for OPEC's spare capacity—well, they have to want to use it. By Irina Slav for More Top Reads From this article on
Time of India
17-06-2025
- Automotive
- Time of India
Global oil demand to peak at 105.5 mb/d by 2030; EVs to displace 5.4 mb/d: IEA
New Delhi: Global oil demand is projected to rise by 2.5 million barrels per day (mb/d) between 2024 and 2030, reaching a plateau of around 105.5 mb/d by the end of the decade, according to the International Energy Agency's (IEA) latest medium-term outlook released on Tuesday. The report, Oil 2025, states that while demand growth continues, structural changes in global supply and consumption patterns are expected to reshape the oil market over the coming years. Production capacity is forecast to rise by more than 5 mb/d to 114.7 mb/d by 2030, led by growth in natural gas liquids (NGLs) and other non-crude liquids. Electric vehicles are projected to displace 5.4 mb/d of oil demand globally by 2030. Electric car sales reached a record 17 million in 2024 and are expected to surpass 20 million in 2025, the report noted. 'Based on the fundamentals, oil markets look set to be well-supplied in the years ahead – but recent events sharply highlight the significant geopolitical risks to oil supply security,' IEA Executive Director Fatih Birol said. 'The IEA remains deeply committed to working with energy producers and consumers to safeguard energy security.' China, which has been the largest driver of global oil demand for over a decade, is expected to see its consumption peak in 2027 due to increased electric vehicle adoption, high-speed rail expansion, and natural gas-powered trucks. On the supply side, while the US remains the largest contributor to non-OPEC output, its production growth is expected to slow as companies focus on capital discipline. Still, output from the US, Canada, Brazil, Guyana, and Argentina is expected to be sufficient to meet demand growth through 2030. The OPEC+ alliance has started to unwind production cuts, but in the absence of major supply disruptions, oil markets are expected to remain comfortably supplied. The report also indicates that demand for combustible fossil fuels—excluding petrochemical feedstocks and biofuels—could peak as early as 2027. Meanwhile, the petrochemical industry is expected to become the dominant driver of oil demand growth from 2026, consuming one in every six barrels of oil by 2030. The shift toward non-crude liquids is also expected to impact refining. With net refinery capacity projected to exceed demand for refined products by 2030, more shutdowns in refining capacity are likely. The replacement of oil with natural gas and renewables in power generation, particularly in the Middle East and especially Saudi Arabia, is expected to further weigh on oil demand. The IEA report provides a longer-term perspective compared to its monthly Oil Market Report, offering forecasts and trends in oil demand, supply, refining, and trade up to 2030.
Yahoo
16-05-2025
- Business
- Yahoo
Oil Set For Weekly Gain on China Trade Deal Hope
Crude oil prices were set for a weekly gain after a string of losses on the news of a trade war ceasefire between the U.S. and China, which sparked hopes the two would come to a mutually beneficial understanding that would end the tariff spat. At the time of writing, Brent crude was trading at $64.64 per barrel and West Texas Intermediate was changing hands for $61.72 per barrel, both up, albeit moderately, from the start of the week. According to Reuters, the weekly gain will be about 1%. The modesty of the weekly gain is likely related to a couple of solid bearish new developments on the geopolitical and the forecasting fronts. On the geopolitical front, reports emerged suggesting the U.S. and Iran were closer to a new nuclear deal than they had been for months. On the forecasting front, the International Energy Agency once again injected pessimism into oil markets predicting slower than previously expected oil demand growth—despite the anticipated end to the U.S.-Chinese trade war. Economic headwinds and record electric vehicle sales are set to materially slow down global oil demand growth for the rest of the year, the IEA said on Thursday. World oil demand rose by 990,000 barrels per day in the first quarter of 2025. But the remainder of the year will see demand growth at just 650,000 bpd, the agency said in its closely-watched monthly Oil Market Report for May. The IEA has over the past few years built a reputation for pessimistic forecasts when it comes to oil demand—only to revise them when data from the physical market points in a different direction. In this case, we've seen a rebound in Chinese oil imports at the start of the second quarter of the year and a surge in Indian oil imports, which lifted them to an all-time high in March. In related recent news, Japanese refiners were scaling back their transition plans to refocus on oil. By Irina Slav for More Top Reads From this article on
