Oil production could be on course to outdo supply by the end of this year, the International Energy Agency has warned.
Following warnings of a slowdown in global demand on weakness from China, the international agency said there could be surplus supply later this year and into next.
This is regardless of whether OPEC opts to reverse supply cuts in the coming months, after the cartel signalled earlier in August that production could be ramped up.
“Our current balances suggest that even if those cuts remain in place, global inventories could build [...] in 2024 and again in 2025 [to] more than cover expected demand growth,” the IEA said.
OPEC, which accounts for over 35% of global supply, trimmed demand forecasts on Monday, citing weaker uptake from China.
This comes after growing tensions between Iran and Israel had sent prices higher, with warnings over demand stalling growth after five consecutive sessions of gains.
West Texas Intermediate ducked below the US$80.00 a barrel mark to sit at US$79.90, while Brent crude sat at US$82.01, after hitting US$82.62 on Monday.
FTSE 100 heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) both dipped on Tuesday following the warning.