Global oil market balance may soon tighten – IEA

The International Energy Agency (IEA) has pointed to a seeming contradiction in the global oil market balance, where the projected surplus does not correspond to the real state of supply and demand.

According to the organization's latest estimates, global supply will increase by 2.1 million bpd this year. This is 300,000 barrels per day higher than the previous forecasts of the agency. At the same time, global demand is expected to grow by only 700,000 barrels per day. This suggests a substantial surplus of crude on the market.

Despite this, the acceleration of oil processing at refineries ahead of summer, as well as the increased use of fuel for power generation, create a sense of scarcity, the IEA noted. For this reason, the increase in supply from OPEC+ does not have a significant impact on the situation. Price indicators also point to a tighter physical oil market.

These comments echo statements made last week by OPEC ministers and leaders and Western oil executives. They said the lack of growth in oil inventories amid increased production indicates the need for additional supplies for the market.