Crude Oil Market Falls on IEA Supply, Demand Forecast

By Adedapo Adesanya

The crude oil market dropped on Thursday due to falling demand, retreating fears of renewed Middle East conflict and expected increases in supply.

Brent crude traded at $67.52 a barrel after going down by $1.88 or 2.71 per cent, while the US West Texas Intermediate (WTI) crude finished at $62.84 a barrel, down $1.79 or 2.77 per cent.

The International Energy Agency (IEA) cut its demand growth outlook, a revision that landed in a market already uneasy about how quickly supply is said to be rising.

Selling accelerated after the Paris-based agency trimmed its 2026 global demand growth forecast to 850,000 barrels per day. A month ago, it was expecting 930,000 barrels per day.

The agency still sees global supply expanding by about 2.4 million barrels per day this year. The balance between supply and demand looks heavy, especially once winter disruptions unwind.

January tightened the market for a moment. Storms shut in more than 1 million barrels per day in North America. Kazakhstan, Russia, and Venezuela were dealing with outages of their own. Global supply fell by roughly 1.2 million barrels per day, but it appears that those barrels are now starting to return.

On its part, the Organisation of the Petroleum Exporting Countries (OPEC) is projecting much stronger demand growth, above 1.4 million barrels per day.

Crude oil production from the OPEC+ alliance slumped by as much as 439,000 barrels per day in January compared to December as a major supply disruption in Kazakhstan added to lower output from Iran and Venezuela, OPEC data showed in its Monthly Oil Market Report (MOMR).

The unplanned outages and lower production could ease to some extent the fears of oversupply that have been weighing on oil prices.

On the geopolitical front, Prime Minister of Israel, Mr Benjamin Netanyahu, said as he was departing the US, noting that President Donald Trump appeared to be framing a resolution to the conflict with Iran over nuclear weapons.

On Wednesday, the American President said after talks with PM Netanyahu that they had yet to reach a definitive agreement on how to move forward with Iran, but that negotiations with Tehran would continue.

Earlier this week, President Trump said on Tuesday that he was considering sending a second aircraft carrier to the Middle East if a deal is not reached with Iran. The date and venue of the next round of talks have yet to be announced.