The IEA issued its outlook for the energy sector. Overall, global demand remains strong with daily demand at 101.9 million barrels, a 2.3 million barrel per day increase from 2022.

In recent months, there has been some signs of North American gasoline demand declining but this has been offset by strong demand from Asia. For next year, it forecasts a smaller increase of 900,000 barrels per day.

Global oil production is expected at 101.6 million barrels per day. This is a 1,500,000 barrel per day increase from last year despite less production from OPEC+. So far, there is no impact on oil production from the conflict between Israel and Hamas. Yet, there is still a daily shortfall which exacerbates the impact of an escalation in geopolitical risk with the gap being made up by inventories.

The attacks did result in a $3 to $4 spike in oil prices, although prices quickly stabilized and remain off recent highs. Currently, there is a push and pull between upwards pressure on the supply side as Russia and Saudi Arabia pull back on production while higher interest rates threaten the demand outlook. So far, demand has proven to be resilient contrary to expectations at the beginning of the year.