Diverging Views

August 12, 2022

The IEA and OPEC have a different oil market outlook

Every month, three widely followed oil prognosticators give their opinion on the current and future oil balances.  The U.S. Energy Information Administration (EIA) usually publishes its Short-Term Energy Outlook (STEO) first, followed by the Oil Market Report from the IEA and the OPEC Monthly Oil Market Report.  Comparing the absolute numbers for oil demand and supply of these publications is not always possible (or useful), because they use slightly different definitions.

However, comparing them with previous forecasts and their own historical time-series alleviates that problem. The Covid-19 significantly disrupted the oil markets in 2020 and 2021 making year-over-year comparisons between agencies even more difficult.  Therefore, to put the current and future oil market developments in perspective, we compare the various supply and demand projections with a pre-pandemic baseline of 2019.

The most recent reports from the agencies demonstrate a few things.  The future is highly uncertain and there is a difference of opinion about oil supply and demand balances for the near-term as well as the medium-term.

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