The new number is a 380,000-bpd upward revision on the IEA’s previous monthly forecast. It also means that the IEA now expects global oil demand this year to average 99.7 million barrels daily.
Supply, according to the IEA, already exceeds demand, as it hit 100.5 million bpd last month, with OPEC+ production adding 530,000 bpd in line with the production increase deal and non-OPEC+ output rising by 870,000 bpd.
Oil prices jumped by over 1 percent after the IEA report was released today, with Brent inching closer back to $100 and West Texas Intermediate topping $92 per barrel.
“With several regions experiencing blazing heatwaves, the latest data confirm increased oil burn in power generation, especially in Europe and the Middle East but also across Asia,” the International Energy Agency said in its report. “Fuel switching is also taking place in European industry, including refining.”
The agency also revised upwards its forecast for oil supply for the full year, noting a smaller than expected decline in Russian oil production and exports.
At the same time, the IEA revised down its supply forecast for North America and noted that the global oil supply remains vulnerable to disruptions. It also highlighted OPEC’s reluctance to add too many barrels to current production levels, which adds a downward risk to supply.