Oil falls after the Energy Agency warned of a supply deficit

Oil prices fell on Friday after the International Energy Agency warned that production cuts announced by OPEC+ producing countries could widen the oil supply deficit and harm consumers.

And by 0820 GMT, Brent crude futures fell ten cents, or 0.12 percent, to $ 85.99 a barrel. West Texas Intermediate crude futures fell five cents, or 0.06 percent, to $82.11 a barrel.

The two benchmarks are expected to record gains for the fourth week in a row, in light of calming fears of the banking crisis that occurred last month and the sudden decision to increase production cuts taken last week by the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia, a group known as OPEC +.

On Thursday, OPEC pointed to the risks of lower oil demand in the summer due, in part, to a production cut of 1.16 million barrels per day.

The International Energy Agency said in its monthly oil report released on Friday that the OPEC+ decision could harm consumers and the global economic recovery.

The agency stated that it expects a decrease in global oil supply by 400,000 barrels per day by the end of the year, noting an expected increase in production of one million barrels per day from outside OPEC +, starting in March, compared to 1.4 million barrels per day that will be reduced by the producing countries in the group.

But it said that at the same time, global oil demand is set to rise by 2 million bpd in 2023 to a record 101.9 million bpd.

The dollar index closed at its lowest level since the beginning of February, after consumer and producer price data in the United States this week reinforced expectations that the Federal Reserve is nearing the end of its interest-raising cycle.

A weaker dollar makes dollar-denominated oil cheaper for investors holding other currencies, boosting demand.