Oil Boom Waiting on the IEA To Clear The Skies
International Energy Agency or IEA is one of the major agencies or authorities that have made themselves experts in the oil industry. The entire oil industry or the entire oil market will take the various aspects of the IEA very seriously.
It has been a long time since all oil traders, oil investors and even oil-producing or exporting countries took the IEA and its announcements seriously. But now it is 2021 and the oil industry is about to boom.
According to various forecasts, the oil industry is about to boom. And one day, before the end of this year, the entire oil industry will experience a boom that will increase the demand for oil.
This is not just a prediction about the oil market or the oil trade. Rather, it is an analysed and proven market forecast.
Let us dive into the oil boom of 2021
This analysis of the oil market is purely a technical analysis based on current oil prices and upcoming oil market prices. The oil boom is rising at this point in time even after a long recession.
Various economies, OPEC member countries and oil producers are affected by the economic recession that has occurred due to pandemics.
The IEA as one of the major agencies has predicted the boom for the oil industry and now the IEA is also advising the investors not to invest in the oil trading market. This situation has become confusing for global oil traders.
The IEA and its predictions about the oil boom
The IEA is one of the most well-known and respected agencies in the oil market. And all these agencies are closely watched by oil market traders. Whether it is Brent crude or any other oil product on the market.
Not only the market sentiment but also the oil price is influenced by the global oil agencies or analysts. The oil supply and demand are served by the oil companies. And these oil companies consider the IEA as one of the most reputable agencies in this oil sector.
Prediction before the pandemic
There are many predictions about crude oil prices and the fluctuations in supply and demand. There are many agencies making predictions about the market. Let us not go too far back in history and go back a year. In the period before the pandemic started, there were many positive predictions about the oil market.
The oil market was one of the fastest-growing markets in the global commodity market. All other financial instruments or trading assets such as currency pairs, stocks and commodities were also growing. But the prediction was that the oil boom and oil stocks would do better than anything else.
Prediction at the beginning of the pandemic
At the beginning of the pandemic, the price of crude oil had not yet fallen. Nor was there yet an oversupply of oil and gas. Oil reserves and stocks were functioning smoothly and members of OPEC were well represented in the market.
But the prediction at the beginning of the pandemic that the market would fall was true. This affected the price of each barrel of oil, the volatility of the market, fuels and their consumption, and overall crude oil production.
Prediction during the pandemic
During the pandemic, the oil market was also in a financial recession, as was the whole world. Very few refineries were operating and exporting oil to the outside world.
But after the pandemic came to the prediction that the oil market would take time to recover. This prediction affected every oil company.
Prediction after the second wave
Oil is traded not only in its physical form but also in the form of oil stocks and oil futures. The price of crude oil is directly or indirectly influenced by the world.
Even if a prediction or forecast is not that accurate, it can change the market. The prediction after the second wave referred to the recovery of the market.
The IEA experts predicted that the spot price of crude oil will rise and that the world, which is in decline, will demand more.
Widely respected report
The widely respected Ballyhooed Report is one of the most important reports published by the IEA. In this report, the IEA OPEC calls on countries to produce more to meet growing demand.
The IEA's guidelines for the global investment community
Besides forecasting commodities or predicting the prices of financial assets, agencies like the IEA also make some recommendations to the market. The IEA also makes many recommendations to the authorities responsible for oil exports.
These guidelines also apply to many oil investors and traders. Recently, the IEA has issued some guidelines for the global economic situation.
No further investment in oil and gas
The IEA recently recommended no further investment in the oil market. Petrol prices are rising and so are oil prices OPEC. Even in this time of high oil prices, the IEA recommends investors not invest in the oil and gas industry.
Zero carbon emissions by 2050
The reason for the IEA's recommendation not to invest in oil is very simple to understand. Zero carbon emissions are the main reason. The IEA recently added that fossil fuel use in the automotive sector and other industries will decline.
The IEA stated that a zero-carbon state must be achieved by 2050.
The confusion over the IEA's guidelines.
You can see that the IEA has two sides to the coin. The IEA advises against investing in oil because a zero-carbon state must be achieved by 2050. Because there will be a zero-carbon emission target for the whole globe and the whole world will make efforts.
This will lead to the whole world using electric cars, etc. On the other hand, the IEA also predicts a boom in the oil industry.
The IEA's decarbonisation plan has confused the whole industry for the first time. No doubt the IEA can give such guidelines and the whole world takes them seriously. But still, there are duplicitous statements by the IEA.
Countries reject the plan
Many countries, including oil-producing nations, rejected the IEA's plan. Some of the countries said the IEA was moving too fast. But some also said it was not possible.
Recovery of oil demand
On the other hand, the IEA's statement about oil demand recovery in many reports created even more confusion among investors about the market and its future. Investors were confused about what was true and what to look out for in the future.
Summary - Oil boom in anticipation of IEA.
Zero carbon emissions are the goal for the whole world. It is for the good of the planet, but it is not yet certain when it will be. The existence of such a plan is very difficult to achieve. Because more fossil fuels are used than sustainable energy.
But it gets worse when we look at the two different statements made by IEA officials. They say that the oil industry will boom. They also say that the oil industry is not so good for investors in the current time frame.
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