(MT Newswires) -- The International Energy Agency (IEA) has revised its forecast from a surplus to a deficit on the oil market. However, this prediction is based on the assumption that OPEC+ will continue its production cuts. Carole Nakhle, CEO of Crystol Energy, notes that the IEA has become more optimistic about oil demand, increasing its forecast for the year. She notes that the IEA, which previously forecast a comfortable market until the end of the year, is now considering a possible deficit, although this is considered marginal.
Nakhle highlights the "big if" regarding OPEC+'s ability to maintain its cuts and the discipline of its members, pointing to the "usual suspects" such as Iraq who are failing to meet their commitments. She discusses the challenges within OPEC+, but remains less concerned about their solidarity than their discipline, citing Russia and Saudi Arabia as the key members holding the group together.
For the US, she mentions that oil inventories have fallen, putting upward pressure on prices. Nakhle notes that US oil production continues to surprise positively, despite pessimistic forecasts, and is a driver of growth for non-OPEC supply.
As far as demand is concerned, Nakhle points out that Asia, and China in particular, is the main contributor. However, she expresses concern that structural problems in the Chinese economy are likely to persist and will require fundamental changes in government policy to address. Chinese demand is growing, but not as fast as some had hoped.
