(Bloomberg) -- Global oil markets are likely to remain “reasonably well-supplied” this year, provided there are no major disruptions, as production outside OPEC+ climbs, the International Energy Agency said.
The Paris-based IEA, which advises major economies, bolstered forecasts for supply growth outside the cartel by roughly 25% to 1.5 million barrels a day, thanks to gains in the US, Canada, Brazil and Guyana.
With world oil demand growth set to decelerate significantly, markets may face a supply surplus from next quarter through to the end of the year, the IEA said in its monthly report on Thursday. It's a sharp contrast to the outlook published by OPEC the previous day.
“Barring significant disruptions to oil flows, the market looks reasonably well supplied in 2024, with higher-than-expected non-OPEC+ production increases set to outpace oil demand growth by a healthy margin,” it said.
Oil prices have largely stagnated this year, trading below $80 a barrel even as ongoing conflict in the Middle East and attacks on shipping in the Red Sea menace exports from a critical region. Prices were supported on Thursday after the US launched another round of strikes on Yemen's Houthis.
Crude futures have also mostly shrugged off additional output cuts by the Organization of Petroleum Exporting Countries and its allies.
The 22-nation OPEC+ coalition, led by Saudi Arabia and Russia, would need to extend the latest curbs — which amount to roughly 900,000 barrels a day — beyond their scheduled expiry in March to prevent global inventories from piling up through the year, the agency said.
In a further blow to oil bulls, IEA now believes that world oil inventories increased during the fourth quarter of last year, instead of the contraction previously expected.
The agency sees world fuel consumption growth slowing almost 50% this year to 1.2 million barrels a day — averaging a record 103 million a day — amid “macroeconomic headwinds” and the growing popularity of electric vehicles.
In contrast, the outlook released by OPEC's Vienna-based secretariat on Wednesday projects almost double the rate of oil demand growth this year, and a market deficit through to the end of 2025. Secretary-General Haitham Al-Ghais said there's no peak for oil consumption on the horizon.
The IEA cautioned that there remains “elevated” risk of disruption to oil shipments via the Suez Canal, through which flows approximately 7.2 million barrels a day of crude oil and refined fuels, or about 10% of world seaborne petroleum trade.
The agency, which co-ordinates the deployment of emergency stockpiles by consumer nations, said it “stands ready to respond decisively if there is a supply disruption and the global oil market requires additional barrels.”
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