In the group's updated oil supply and demand forecasts released Thursday, they cut their demand estimates due to expectations for lower economic growth while supplies should increase from non-OPEC producers, writes Reuters.
World oil market looks "adequately supplied for now" after a substantial production increase in the last six months, but the industry is fraught with risks, the International Energy Agency said in its monthly report.
Now, with data showing Chinese exports to have registered a double digit growth in the month of September, despite escalating trade tensions with the USA, concerns about demand growth have eased a bit.
"Expensive energy is back, with oil, gas and coal trading at multi-year highs, and it poses a threat to economic growth", particularly for emerging economies, it warned. This decision was made to put more supply into the world oil market in order to tame the cost of crude.
At the heart of this softening oil demand backdrop are a myriad of downward pressures on the global economy, said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.
Data from Baker Hughes BHGE, +0.62% Friday showed that the number of active USA rigs drilling for oil , which offers a peek at output activity, climbed by 8 to 869 this week.
IEA thinks global supply is healthy.
A monthly report from the Organization of the Petroleum Exporting Countries released Thursday revealed a rise in OPEC and Russian crude-oil production in September, more than making up for a continuing decline in Iranian output ahead of the implementation of USA sanctions on Iran's oil industry. In addition, OECD inventors were expected to have risen by 43 million barrels in the third quarter, the highest quarterly increase in stocks since the first quarter of 2016. The week saw oil prices tumble on the back of higher inventories and weakness in the United States equity market.
Yet the IEA also recognized that the efforts by producers have sharply depleted the amount of spare supply kept aside for disruptions and emergencies, most of which is held by Saudi Arabia.
In September, supply from Iran dropped to a two-and-a-half year low, the West energy watchdog said. Iranian exports have slumped about 26 percent to 1.8 million barrels a day.