Oil prices have reached their highest level in three months, following a warning from an industry body about extended supply cuts by the OPEC cartel until year’s end.
Today, Brent crude, a global benchmark, climbed up to 0.9% to $84.82, marking its highest intraday level since November. This increase comes after the International Energy Agency (IEA) alerted about a persistent supply deficit throughout the year.
According to the Paris-based IEA, this deficit is expected due to the prolongation of OPEC’s supply reductions, which are now anticipated to continue until the end of 2024.
The IEA stated, “With this extension, our annual balance shifts from a surplus to a minor deficit. However, oil tanks might find some respite as the substantial quantities of oil currently in transit reach their destinations.”
Additionally, the IEA has raised its forecast for global oil demand growth in 2024 by 110,000 barrels, now expecting an increase of 1.3 million barrels per day. This adjustment is partly due to a more robust projection for US oil production.
The agency also highlighted a growing demand for ship fuel, as vessels are taking longer routes to circumvent Houthi attacks in the Red Sea.
