IEA projects a comfortably supplied oil market by 2025 despite a demand increase

The International Energy Agency (IEA), which is a part of the OPEC+ producer group, said that there will be enough oil on the world market in 2025. This was despite OPEC+ extending its oil supply cuts, and a slightly higher demand forecast than expected.

The Agency said that its current outlook indicates a 950,000 barrels a day overhang in the next year – equal to almost 1% of the world's output – despite OPEC+ extending their output cuts until April 2025. OPEC+ is made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia.

China is a major reason why oil demand growth was lower than expected in 2018. Oil consumption in China has been rising for many years. However, the economic downturn and a shift to electric vehicles have tempered growth prospects.

In its monthly report on the oil market, the IEA said that it had increased its forecast for global oil demand growth in 2025 to 1.1m bpd, up from 990m bpd in the previous month. "This was largely due to China's recent stimulative measures," the report stated.

The Politburo said on Monday that China would adopt a "properly loose" monetary and fiscal policy in the coming year. This will be the first time it has done so in 14 years. It is also expected to implement a proactive fiscal policy aimed at boosting economic growth. (Reporting and editing by Susan Fenton, Barbara Lewis and Alex Lawler)

(source: Reuters)