# Oil gains after IEA sees demand rising to record high Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-14 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Oil prices rise on IEA record high demand forecast Meta Description: Discover why oil prices are on the rise as the International Energy Agency predicts a surge in global demand driven by a recovery in Chinese consumption. URL: https://financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-highhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-14t004759z1lynxmpej3d00lrtroptp4global-oil-1736814144893-compressed.jpg) # Oil gains after IEA sees demand rising to record high By Ron Bousso LONDON (Reuters) -Oil prices rose on Friday after the West’s energy watchdog said it expected global demand to rise to a record high this year on the back of a recovery in Chinese consumption. The International Energy Agency (IEA) also warned that output cuts announced by OPEC+ producers could exacerbate an oil supply deficit and hurt consumers. Brent crude futures were up 22 cents, or 0.26%, to $86.31 per barrel at 1046 GMT. West Texas Intermediate crude futures (WTI) rose 21 cents, or 0.26%, to $82.37. Both contracts were set to post a fourth consecutive week of gains amid easing concerns over a [banking crisis](https://www.financedigest.com/how-the-2023-banking-crisis-unfolded.html "How the 2023 banking crisis unfolded") last month and the surprise decision last week by the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia, a group known as OPEC+, to further cut output. Brent is [set to post a 1.4% weekly gain](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook"), while WTI was up 2%. In its monthly report on Friday, the IEA said world oil demand is set to grow by 2 million barrels per day (bpd) in 2023 to a record 101.9 million bpd, driven in most part by stronger [Chinese consumption after the lifting of COVID](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened") restrictions. Jet [fuel demand](https://www.financedigest.com/oil-falls-on-concerns-economic-slowdown-may-dent-fuel-demand.html "Oil falls on concerns economic slowdown may dent fuel demand") accounts for 57% of the 2023 gains, it said. But [OPEC on Thursday flagged downside risks to summer oil demand](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") as part of the backdrop for its decision to cut output by a further 1.16 million bpd. The [IEA said the OPEC+ decision could hurt consumers and global](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA") economic recovery. Consumers confronted by [inflated prices](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc.html "UK shop price inflation hits record 8% in January: BRC") for basic necessities will now have to spread their budgets even more thinly,” the IEA said in its monthly oil report. This augurs badly for the [economic recovery](https://www.financedigest.com/sme-productivity-programme-re-purposed-to-help-businesses-prepare-for-covid-19-economic-recovery.html "SME productivity programme re-purposed to help businesses prepare for Covid-19 economic recovery") and growth,” it added. The IEA said it expected global oil supply to fall by 400,000 bpd by the end of the year, citing an expected [production increase of 1 million bpd from outside of OPEC+ beginning in March versus a 1.4 million bpd decline](https://www.financedigest.com/roche-flags-2023-earnings-decline-on-slump-in-covid-products.html "Roche flags 2023 earnings decline on slump in COVID products") from the producer bloc. The U.S. [dollar index was trading at roughly a one-year low](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low"), after U.S. consumer and producer price data releases this week raised expectations that the [Fed was approaching the end of its rate hiking](https://www.financedigest.com/asian-shares-gain-as-fears-about-rapid-fed-hikes-bank-crisis-fade.html "Asian shares gain as fears about rapid Fed hikes, bank crisis fade") cycle. The weakening greenback makes dollar-denominated [oil cheaper for investors](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") holding other currencies, boosting demand. (Additional reporting by Andrew Hayley in Beijing and Trixie Yap in Singapore; editing by Mark Potter and Jason Neely) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---