The International Energy Agency (IEA) reported in its monthly oil market report that the rise in oil prices, which reached a three-year high in October, contributed to an increase in global oil production, which should subsequently help to stop the price rally.
"There are signs that the global oil market remains tight, but the rise in oil prices may stall amid increased supplies," the IEA said, adding that high prices are an important catalyst for an increase in drilling activity in the United States, even as operators stick to capital discipline pledges
The IEA noted that the volume of oil production in the United States was equal to half of the increase in global production last month and should account for 60% of non-OPEC+ supply gains in 2022.
As for the prospects for supply and demand, the IEA left largely unchanged the forecast for oil demand growth - at the level of 5.5 million barrels per day in 2021 and 3.4 million barrels per day in 2022. Meanwhile, the IEA expects global oil production to grow by 1.5 million barrels per day in the last three months of 2021. The IEA also revised its global oil supply forecast 330,000 barrels per day higher for the fourth quarter to reach 99.2 million barrels per day by year-end.
In addition, the IEA noted that higher oil prices did not lead to an increase in production in OPEC+, unlike the United States.