Oil prices: IEA, OPEC weigh in with forecasts

Oil prices are hovering near multi-year highs, and even with supplies increasing there will be a strain on the markets that will result in higher prices, potentially a bad sign for the global economy.

Following a big production increase in the last six months, the oil markets appear to be “adequately supplied for now,” but the industry is coming under strain, according to an article in Reuters citing The International Energy Agency. “This strain could be with us for some time and it will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy.”

According to the IEA’s abstract about the report on its website, the group says that it is its position that “expensive energy is back.”

On Thursday, OPEC’s secretary general said that the organization is in no rush to increase output, even with higher prices, noting that supply and demand should be in balance next year. 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.