IEA does not expect 'huge increase' in crude prices

Oil prices are not expected to increase “significantly” as demand slows and global crude markets face glut, Reuters reported, citing International Energy Agency (IEA) executive director Fatih Birol. 

 “Prices are determined by the markets...If we see the market today we see that the demand is slowing down considerably,” he said during a two-day energy conference in New Delhi.

However, serious political tensions could yet impact market dynamics, he added.

Read: Oil prices to remain volatile in wake of tanker attacks

Crude oil prices rose nearly 2 percent on Friday after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz. 

The IEA is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, he told Reuters.

Last year, the agency predicted that 2019 oil demand would grow by 1.5 million bpd. 

However, it cut its growth forecast to 1.2 million bpd in June.

“Substantial amount of oil is coming from the United States, about 1.8 million barrels per day, plus oil from Iraq, Brazil and Libya,” Birol said.