The stalled talks of the Organization of the Petroleum Exporting Countries and its allies could bring about a supply deficit that would hit both producers and consumers, the International Energy Agency warned.
- The IEA expects continued volatility in oil markets until the OPEC+ agrees on production policy, noting that the “remote” possibility of having countries produce their own supply could cause a spike in prices.
- The agency cautioned that prices could accelerate both the electrification of transport and energy transitions, but it could also weigh on the economic recovery of emerging and developing countries.
- The IEA predicts global oil demand to increase by 5.4 million barrels a day in 2021 and by another 3 million barrels in the following year, mostly the same as the previous month’s forecast.
- Market sentiment could also be hit by the continued spread of the COVID-19 delta variant, as a resurgence of the pandemic could be detrimental to demand.
Brent crude futures grew 0.5% to $75.57 a barrel on Tuesday morning, while the West Texas Intermediate futures rose 0.6% to $74.51.