Recently, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) that global oil market demand is expected to exceed supply next year. This move indicates that EIA has revised its previous forecast of oversupply in the global oil market.

EIA introduced that since OPEC+ decided at its meeting in June to continue coordinated production cuts until the end of next year, the agency has revised its previous forecast. EIA said that the supply gap is expected to be smaller next year than this year. The latest forecast shows that global oil demand will be 104.7 million barrels/day and supply will be 104.6 million barrels/day next year. Previously, EIA predicted that global oil demand will be 104.5 million barrels/day and supply will be 104.7 million barrels/day next year.

As OPEC+ continues to cut production, supply shortages are expected to further intensify by the end of this year. EIA predicts that demand will exceed supply by about 750,000 barrels/day in the second half of this year. The previous forecast was that the supply gap in the second half of this year would be around 550,000 barrels/day. Oil prices will rise on supply shortages, with North Sea Brent crude expected to average $89 a barrel in the second half of this year, up from $84 in the first half.