Oil production is up but IEA predicts rising energy prices

Energy prices could soon increase, but not at all with the peak oil – the theory that production will soon reach a peak and begin to fall – predicts the International Energy Agency ( IEA) in its report on the oil market released Friday.

The overall supply has actually hit a record of more than 100 million barrels a day, thanks to a combination of factors such as the American shale boom and increased production in Libya and Nigeria.

Several other factors point to a drop in prices: The EIA is revising by 100 000 barrels a day the projected growth of its demand for 2018 and 2019 compared to its previous report. And stored oil has increased by about 500,000 barrels per day in the second quarter of 2018 – a growth estimated by the IEA in the third quarter – suggesting that supply is still slightly higher than demand.

However, barriers in the global market, such as lagging infrastructure for North American shale gas exports, currency fluctuations, US sanctions against Iran and trade disputes, may lower the price of energy.

While the Indian government has declared that it will not respect the sanctions imposed by Iran and that China will only partially comply, the decline in Iranian production since the United States announced that sanctions ( which will come into effect on November 4) has been enormous: around 800,000 barrels a day. And Venezuela, in full inflation and political instability, produces less and less oil.

Thus, despite record production, Brent oil prices remain above $ 80 per barrel. The EIA writes, "Our position is that expensive energy is back, with oil, gas and coal trading at several-year highs, and that poses a threat to economic growth. "