Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

IEA Warns Oil Supply May Not Keep Pace With Demand Next Year

Commodities Jun 15, 2022 05:28AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- Oil demand is likely to stay ahead of supply growth next year, the International Energy Agency warned on Wednesday, pointing to risks of prolonged disruptions from Russia's invasion of Ukraine and a continued recovery in consumption as the pandemic fades. 

In its first projection for the supply-demand balance in 2023, the Paris-based organization said world oil demand is likely to rise by 2.2 million barrels a day on average to 101.6 million b/d, topping its pre-pandemic level. For this year, it expects an average rise in demand of 1.8 million b/d. 

Most of the increase in demand next year will come from China and other developing economies, with China, in particular, facing a delayed rebound in consumption due to its policy of reacting quickly and aggressively to stamp out any sign of COVID-19. Lockdowns have caused sharp drops in consumption in key economic hubs such as Shanghai this year.

But importers face increasing difficulties in getting their hands on oil. The IEA also warned that the output of the so-called OPEC+ bloc could fall by as much as 520,000 barrels a day next year, after rising an estimated 2.6 million barrels a day this year.

Much of that decline is due to Russia. Western sanctions have led to oil companies such as Exxon (NYSE:XOM) and Shell (LON:RDSa) exiting their Russian ventures, while oilfield services companies such as Schlumberger (NYSE:SLB) have also withdrawn. In addition, the EU has said it will phase out imports of seaborne Russian crude by the end of the year. That is causing both short and medium-term problems for a Russian oil industry which is configured largely to serve European markets. 

Russia's partners in OPEC also have a dwindling amount of spare capacity: countries such as Iran and Venezuela remain hobbled by U.S. sanctions, while Libya's output has collapsed again in recent weeks as rival factions vie for power across the country. 

The IEA also sees U.S. companies continuing a steady rise in their output as confidence returns to the industry that suffered a wave of solvency problems during the pandemic. It sees non-OPEC+ supply rising 1.9 million b/d this year and 1.8 million b/d in 2023, with over half of the 2023 increase coming from the U.S.

IEA Warns Oil Supply May Not Keep Pace With Demand Next Year
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
John Berry
John Berry Jun 15, 2022 7:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
See you at $200
jack frost
jack frost Jun 15, 2022 6:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nobody cares Spamdra
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email