The International Energy Agency stated that despite OPEC+'s decision last week to postpone increasing supply, the global oil market will still face oversupply next year.

The International Energy Agency predicts in a monthly report that if the group continues its plan to resume production from April, the world market will supply over 1.4 million barrels per day. Even if OPEC+completely cancels next year's interest rate hike, there will still be an excess of 950000 barrels per day.

On December 5th, OPEC+, led by Saudi Arabia and Russia, once again agreed to postpone plans to resume production shutdowns amid fluctuations in crude oil prices and slow down growth rates after the start of the second quarter.

According to the Paris based International Energy Agency (IEA), global oil consumption is expected to increase by 1.1 million barrels per day, or approximately 1%, by 2025. But it expects that non OPEC+supply, led by the United States, Brazil, Canada, and Guyana, will increase by about 36%.

The agency stated that the OPEC+production cuts have significantly reduced the potential oversupply that may occur next year. Nevertheless, "strong supply growth from non OPEC+countries and relatively moderate global oil demand growth make the market look supply comfortable

Since early July, London crude oil prices have fallen by about 16%, trading at nearly $74 per barrel, as traders ignore conflicts in the Middle East and focus on China's shaky economic activity, which has been the engine of oil consumption for the past two decades.

For several months, the Organization of the Petroleum Exporting Countries and its partners have been seeking to restore production that has been idle for the past few years, but have been frustrated by deteriorating market conditions.

The alliance also strives to ensure that its members comply with the production restrictions they have agreed upon. According to data from the International Energy Agency, driven by the United Arab Emirates, Iraq, and Russia, they collectively exceeded their daily quota in November, reaching 680000 barrels.

The organization predicts that global demand will increase by 840000 barrels per day this year, averaging 102.8 million barrels per day. Growth will be concentrated on petrochemical raw materials as the shift towards more efficient electric vehicles limits the demand for transportation fuels.

In the past few months, the OPEC Secretariat has retreated from its strongly bullish forecast and is closer to a more optimistic outlook from the International Energy Agency. OPEC has cut production for five consecutive times, lowering its forecast for demand growth in 2024 by 27%. Wednesday's latest assessment of the downgrade is the largest so far.