The Strategist

IEA expects another oil price rally



08/12/2022 - 10:26



Due to the high likelihood of supply disruptions, the International Energy Agency (IEA) does not completely rule out another price increase in the oil market in a monthly report.



Daniel Christensen
Daniel Christensen
The IEA states that "further price rally (in the oil market) cannot be ruled out" given the significant chances of supply disruptions.

The OPEC+ partners resolved to symbolically increase supply by 100,000 bpd in September. As an explanation, the alliance gave the sparse production capacity, which should be utilized with caution. As a result, the IEA forecasts that OPEC+ will not considerably raise output in the upcoming months.

Despite this, analysts believe that the world's oil reserves will increase by roughly 900,000 barrels per day by the end of the year and by 500,000 in the first half of 2023, according to the agency. The severe supply situation on the market should be further alleviated by the release of strategic reserves of the IEA countries.

However, the commercial reserves in OECD nations are still 290 million barrels per day below the five-year average, and the risk of supply interruptions is still significant, so the IEA believes that another price increase is still possible.

source: iea.org

 




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