Oil prices decline after IEA report eases concerns over supply shortage
Date
11/17/2024 4:21:47 AM
(MENAFN) Oil prices declined following the International energy Agency's (IEA) report highlighting a rise in global oil production, easing concerns over potential supply shortages. At 10:25 a.m. local time (0725 GMT), the international benchmark for oil, brent crude, fell by 1.2 percent to USD71.33 per barrel, down from the previous session's closing price of USD72.22. Similarly, the US benchmark West Texas Intermediate (WTI) dropped by 1.3 percent, reaching USD67.50 per barrel, compared to the prior session’s close of USD68.39.
The IEA’s Oil Market Report released on Thursday indicated that OPEC’s crude oil production increased to 26.97 million barrels per day (bpd) in October, reflecting a rise of 210,000 bpd compared to the previous month. This uptick in production contributed to a less tight market, further easing concerns of supply constraints. Additionally, the IEA projected that the global oil oversupply could increase in the coming months, which is also likely to exert downward pressure on prices.
The IEA’s forecast for global oil output growth in 2024 anticipates an increase of 640,000 barrels per day, reaching a record high of 102.91 million bpd. This production growth, combined with expected growth in global oil demand, suggests that oil prices may remain under pressure, despite some of the earlier concerns about potential shortages. The IEA also projected further growth in global production in 2025, with estimates of up to 104.96 million bpd.
In addition to the IEA’s outlook, data from the US Energy Information Administration (EIA) also played a role in dampening prices. The EIA’s November 2024 Short-Term Energy Outlook Report revised its forecast for US crude oil production, projecting an increase in output. This, coupled with expectations of higher global oil demand growth in 2025, has led the EIA to revise its crude oil price forecast downward by USD2 per barrel through the end of next year, signaling a more balanced market ahead.
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