On Tuesday, oil prices plummeted after the International Energy Agency (IEA) projected record petroleum production for the remainder of 2024.
West Texas Intermediate (WTI) crude oil futures for December delivery declined by -0.15% to $78.14 per barrel on November 14. However, analysts predict a recovery of up to 0.50% to $78.53 a barrel when the next market session closes.
Simultaneously, Brent oil January futures shed -0.17% to $82.38 bbl, with an anticipated 0.49% rebound to $82.78 bbl. WTI and Brent ended Monday 1.41% and 1.34% higher, respectively.
According to IEA’s monthly report, global crude oil production will rise by 1.70 million barrels per day (bpd). By year-end, the petroleum supply will hit a new record of 103.40 million bpd.
The United States will primarily contribute to the growing black gold stockpiles, aided by Brazil and Guyana. US petrol yield is expected to increase year-over-year by 1.80 million bpd to 19.30 million barrels per day.
On the demand side, EIA anticipates the total global demand to reach 102.00 million bpd in 2023. Therefore, worldwide crude oil stocks will add 1.40 million barrels daily, leading to market saturation.
China will contribute the most to the surging global demand for the energy commodity. The EIA estimates Chinese petrol demand to rise by 1.80 million bpd this year.
IEA Forecast Signals Futility of Oil Output Cuts
In June, the Organization of the Petroleum Exporting Countries Plus (OPEC+) announced further crude oil production cuts through 2024. Its de facto leader, Saudi Arabia, slashed its petroleum output by -1.00 million barrels per day in the following month.
Russia followed suit with a reduction of -300,000.00 black gold bpd. OPEC+ insisted that the output cuts were necessary to prevent oil prices from crashing below acceptable levels.
Nevertheless, many economists regard the voluntary cuts as ineffective. Instead, they drove petrol importers to turn to other black gold exporters, with the US being the primary beneficiary.
Furthermore, analysts highlighted how oil prices failed to breach the $100.00 bbl resistance level despite support from the Israel-Hamas conflict.
