Oil prices dropped Thursday after the International Energy Agency cut its demand growth outlook, a revision that landed in a market already uneasy about how quickly supply is said to be rising.
Brent crude traded near $67 a barrel in the afternoon, down roughly 3% on the session. U.S. WTI slipped into the $62s. Selling accelerated after the IEA trimmed its 2026 global demand growth forecast to 850,000 barrels per day. A month ago, it was expecting 930,000.
The number itself is not as dramatic as the context. The agency still sees global supply expanding by about 2.4 million bpd this year. Put the two figures side by side and the balance starts to look heavy, especially once winter disruptions unwind.
January tightened the market for a moment. Storms shut in more than 1 million bpd in North America. Kazakhstan, Russia, and Venezuela were dealing with outages of their own. Global supply fell by roughly 1.2 million bpd. Those barrels are now starting to return.
OPEC is projecting much stronger demand growth, above 1.4 million bpd, and that split in outlook has become a fault line for traders. Thursday’s price move suggests the market is taking full advantage of the IEA’s slower-growth view, at least for now.
The downgrade lands as hedge funds and other money managers have already been trimming bullish crude positions. A softer demand outlook gives traders another reason to question how tight the market will look by midyear.
The focus is shifting away from short-term outages and back to the second half of the year. If production rebounds as expected while demand growth softens, inventories build. That risk is what weighed on crude during the session.
By Julianne Geiger for Oilprice.com
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