The International Energy Agency said in its monthly report on Friday that the global oil market will return to surplus in the fourth quarter, as Middle East exports recover faster than demand grows, despite continuing attacks on shipping.
The agency expects supply to average about 105 million barrels a day in the last quarter, 1.7 million barrels a day above expected demand, after previously forecasting a deficit. It said the market “is showing early signs of rebalancing”, with supply exceeding demand for the first time since the Iran war began on 28 February.
The report noted that Brent crude has fallen about 32% from its early-October peak of $136 a barrel to around $93 at the time of writing, while European diesel prices fell 11% over the same period to about $180 a barrel, but remain 77% above pre-war levels.
The agency attributed the continued diesel shortage to attacks on Russian energy infrastructure disrupting its exports, along with supply losses in the Middle East. It said 71 million barrels of its members’ emergency stocks will be available by the end of February, including 15 million barrels of diesel.
The report says faster draws on emergency diesel stocks will help close the gap until refinery output recovers.
Source: International Energy Agency, Sky News Arabia, Al-Ahram Gate