It's a marked reversal for the Paris-based agency, which just a month ago was urging the Opec+ alliance to open the taps or risk a damaging spike in prices
The International Energy Agency cut forecasts for global oil demand “sharply” for the rest of this year as the resurgent pandemic hits major consumers, and predicted a new surplus in 2022.
It’s a marked reversal for the Paris-based agency, which just a month ago was urging the Opec+ alliance to open the taps or risk a damaging spike in prices. The oil cartel heeded calls to hike supply, which is now arriving just as consumption slackens.
The analysis also jars with Wednesday’s call from the US — the IEA’s most influential member — for the Organization of Petroleum Exporting Countries and its allies to ramp production up faster.
“The immediate boost from OPEC+ is colliding with slower demand growth and higher output from outside the alliance, stamping out lingering suggestions of a near-term supply crunch or super cycle,” the IEA said in its monthly report.
Oil prices have retreated 6 percent this month as the contagious delta variant triggers renewed lockdowns in China and other key Asian consumers where vaccination rates are lagging. Brent futures are trading near $71 a barrel, having hit a two-year high near $78 in early July.
The “recent rally has lost steam on concerns that a surge in Covid-19 cases from the Delta variant could derail the recovery just as more barrels hit the market,” the IEA said.
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