Jeff Currie, global head of commodities at Goldman Sachs, joins CNBC’s ‘Squawk Box’ to discuss oil prices and the global commodities market. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
The International Energy Agency said on Tuesday that soaring oil prices could soon turn lower as the U.S. leads a rebound in global supply.
Oil prices have soared above $80 a barrel over the last few weeks, hitting their highest level in seven years, as demand outstripped supply. The momentum behind the price rally has even tempted some forecasters to predict a return to $100-a-barrel oil, although not everyone shares this view.
“The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the IEA said in its closely watched monthly report.
“Contrary to hopes expressed in Glasgow at COP26 this is not because demand is declining, but rather due to rising oil supplies.”
Demand for oil is also strengthening because of robust gasoline consumption and increasing international travel as more countries re-open their borders, the influential energy agency said.
Higher oil prices, weaker industrial activity and an alarming resurgence of Covid-19 infections in Europe, however, will likely temper price rises, the group added.
International benchmark Brent crude futures traded at $82.58 a barrel on Tuesday morning in London, up around 0.6%, while U.S. West Texas Intermediate futures stood at $81.28, over 0.5% higher.
The IEA kept its forecast for oil demand growth largely unchanged from last month at 5.5 million barrels per day for 2021 and 3.4 million barrels per day for 2022.
‘Supply is finally on the rise’
“As we head towards the end of the year, we are expecting continued strong growth in demand, but supply is finally on the rise,” Toril Bosoni, oil market analyst at the International Energy Agency, told CNBC’s “Street Signs Europe” on Tuesday.
“So, OPEC+ is continuing to unwind their cuts but we are also seeing higher supplies from other producers outside of the group and so we’re seeing that the market is moving closer to balance.”
The IEA said it expected a rise of 1.5 million barrels per day in global oil output in the final three months of the year, with the U.S. alone accounting for 400,000 barrels of this growth.
OPEC kingpin Saudi Arabia and non-OPEC leader Russia are each set to account for 330,000 barrels per day of the increase, in line with their OPEC+ targets. By December, Saudi Arabia and Russia are each set to pump over 10 million barrels per day for the first time since April last year, the IEA said.
The energy agency revised its global oil supply forecast 330,000 barrels per day higher for the fourth quarter to reach 99.2 million barrels per day by year-end. That’s up 6.4 million barrels per day year-on-year.
The U.S. is forecast to account for 60% of non-OPEC+ supply gains next year, now forecast at 1.9 million barrels per day, although the country is not expected to return to pre-Covid levels until the end of 2022.
The IEA said that while stronger oil prices had prompted some U.S. producers to ratchet up production, the same could not be said for OPEC+.
The energy alliance decided to keep production policy steady in early November, raising output 400,000 bpd, defying pressure from major consumers for a higher increase to help cool the market.
The oil producer group is set to meet again on Dec. 2.
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast
Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
https://www.cnbc.com/select/best-credit-cards/
#CNBC
#CNBCTV