Oil prices have rallied this morning despite the International Energy Agency’s warning of a “major surplus” of the commodity by the end of the 2030s.
The IEA stated that slowing demand, driven by the transition to greener energy, coupled with an increase in production, is expected to boost oil supplies.
Brent crude prices ignored the warning, rising by 0.6% to US$82.40 per barrel, while West Texas Intermediate saw a gain of 0.8% to US$78.52.
Global oil production is expected to surpass demand before 2030, with the United States and other countries in the Americas driving the increase in supply.
“As the pandemic rebound slows, clean energy transitions progress, and China’s economic structure shifts, global oil demand growth is decelerating and is set to peak by 2030,” said Fatih Birol, executive director of the IEA.
“This year, we anticipate demand to increase by around one million barrels per day.
“The report’s projections, based on the latest data, indicate a significant supply surplus emerging this decade, suggesting that oil companies should ensure their business strategies and plans are prepared for these changes.”
Despite the warning, both Shell and BP showed resilience, with their shares rising by just under 1% today.
