Global oil supply may struggle to keep up with demand beyond 2020, which could prompt a surge in oil prices unless new investment projects are agreed, according to the latest report by the International Energy Agency (IEA).
The latest five-year oil market forecast, previously known as the medium-term oil market report projected a relatively upbeat outlook through until 2020 although supply growth is expected to plummet thereafter.
Oil supply in North America and Brazil in particular is growing and is expected to continue rising through the next three years. However, the Paris-based organization warned that investment levels must improve to support further growth beyond 2020.
"We are witnessing the start of a second wave of U.S. supply growth, and its size will depend on where prices go," Fatih Birol, the IEA's Executive Director, said in the report published Monday.
"But this is no time for complacency. We don't see a peak in oil demand any time soon. And unless investments globally rebound sharply, a new period of price volatility looms on the horizon," Birol added.