The International Energy Agency warned that world Oil Markets are likely to remain volatile following a breakdown in talks between OPEC members and their non-OPEC allies, creating a no-win situation. The IEA said energy market participants were closely monitoring the prospect of a deepening supply deficit if a deal was not reached by the Organization of the Petroleum Exporting Countries and its oil-producing allies.The IEA said that the Oil Markets remain volatile until there is clarity on OPEC+ production policy.
The volatility does not help ensure orderly and secure energy transitions nor is it in the interest of either producers or consumers.OPEC abandoned talks last week that would have boosted oil supply.Most diplomats agreed to increase oil production by around 400,000 barrels per day in monthly installments from August until the remaining supply cuts were unwound. This was likely to extend supply cuts through to the end of 2022.
The IEA said it expects global oil demand to rise by 5.4 million barrels per day this year and by a further 3 million barrels in 2022, largely unchanged from last month’s forecast. International benchmark Brent crude futures traded at $75.57 a barrel on Tuesday morning, up 0.5% for the session, while U.S. West Texas Intermediate futures stood at $74.51, around 0.6% higher.Oil prices rallied more than 45% in the first half of the year, supported by the rollout of Covid vaccines, a gradual easing of lockdown measures and record production cuts from OPEC+.