Oil prices experienced a decline on Wednesday following the release of the Organization of Petroleum Exporting Countries (OPEC) latest monthly report, which maintained its global oil demand forecast from October. In addition, the International Energy Agency (IEA) revealed a significant shift in its projections, indicating that it no longer anticipates oil and gas demand to peak by 2030 but rather to continue increasing well into 2050.
In the report, OPEC projected an increase in oil demand, estimating a rise of 1.3 million barrels per day (b/d) by 2025 and 1.38 million b/d by 2026. Following this announcement, West Texas Intermediate (WTI) crude futures dropped by 1.3%, trading around $60 a barrel. Similarly, Brent crude, the global benchmark, was observed trading at approximately $64 a barrel.
The IEA forecast indicated that global oil and gas demand is likely to persist in its upward trajectory, projecting oil demand to reach 105 million b/d by 2035 and 113 million b/d by 2050 under its “Current Policies Scenario,” which is based on existing regulations. The IEA’s previous forecast had anticipated that demand would peak by 2035; however, a slower pace of adoption for green energy technologies, along with increasing demand from emerging markets, the aviation and shipping industries, and use as petrochemical feedstock, prompted the revision.
As part of its analysis, the IEA is currently predicting a surplus of over 4 million b/d by 2026, despite OPEC+ countries having raised production over the past six months. However, recent sanctions imposed by the US Treasury Department on Russia’s largest oil producers, Rosneft and Lukoil, have added complexity to these projections. These sanctions threaten to tighten supply if significant produce is withdrawn from the market.
During OPEC+’s recent November meeting, member countries announced an additional increase in monthly production of 137,000 b/d for December. Nonetheless, the cartel signaled a pause in any further production changes throughout the first quarter of next year, which the market interpreted as a cautious stance regarding potential oversupply issues.
This report coincides with the gathering of major nations in Brazil for the COP30 climate change summit, where discussions are likely to focus on global energy policy and sustainability efforts.
