The International Energy Agency confirmed on Tuesday that the decline in oil prices over the past weeks, due to fears of a potential recession, contrasts with expectations of supply shortages and increased demand later in the year. The agency noted that "the current pessimism in the market starkly contrasts with the tighter market balances we anticipate in the second half of the year, where demand is expected to exceed supply by about two million barrels per day."
It added that the United States and Brazil would experience moderate growth in oil supplies at 1.2 million barrels per day during the year, as the agreed production cuts by the OPEC+ alliance in April mean that oil production from the group of producing countries will decrease by 850,000 barrels per day, starting from then until December.
The agency raised its forecast for global oil demand by 200,000 barrels per day to 102 million barrels per day, indicating that China's recovery after lifting COVID-19 restrictions has exceeded expectations, with demand reaching a record level of 16 million barrels per day in March. It is expected that demand from the world's largest oil importer will account for nearly 60% of global demand growth in 2023.
