By Ronnel W. Domingo
Petroleum-fed pressures on inflation may be cooling down as oil demand seems flagging while supply is poised to reach a record high next year, latest energy data suggested.
The International Energy Agency (IEA) said in its latest monthly Oil Market Report higher oil prices and a deteriorating global economic environment “have started to take their toll on oil demand.” The France-based IEA said the forecast growth in global oil demand in 2022 was “marginally reduced” to 1.7 million barrels per day (mbpd) to bring the full-year number to 99.2 mbpd.
For 2023, global demand is expected to grow further by 2.1 mbpd to reach 101.3 mbpd. Meanwhile, the IEA has penciled in an average supply of 100.1 mbpd this year, which the agency said would pave the way to a record 101.1 mbpd inventory in 2023.
The IEA said that in June alone, world oil supply had jumped by 690,000 bpd to 99.5 mbpd amid “resilient Russian production” and higher output from the United States and Canada.
“Benchmark crude oil futures plunged by more than $20 per barrel in June as a worsening economic outlook fueled a broad market sell-off,” the IEA added. When the report was being prepared, the de facto global benchmark Brent crude was below $100 per barrel. As of this writing, Brent crude was back above the threshold at $101.99 per barrel. Mirroring this, the Asian bellwether Dubai crude stood at $102.55 per barrel after a few brief interludes below $100 per barrel.