Crude Oil Prices Fall Back After IEA Warns of Sharp Drop in Demand
Crude oil prices fell back on Friday after Thursday's sharp rally to a three-and-a-half-month high, following a warning from the International Energy Agency (IEA) about a significant drop in global oil demand.
The IEA forecasted that high oil prices and restricted supply would cause the biggest decline in oil demand this year since the Covid-19 pandemic. Despite this projected drop, the agency raised its estimate for this year's global oil deficit to 1.7 million barrels per day (bpd), up from last month's 1.3 million bpd.
The IEA also pushed back the expected return of a global oil surplus to 2027, later than its previous estimate of late 2026. This shift in the outlook for oil demand and supply has provided support for crude prices, which have been underpinning by tensions between the US and Iran.