(Bloomberg). — Global oil market tightness that drove prices to an all-time high of seven years is beginning to ease, according to the International Energy Agency.

Demand growth remains robust, but supply is catching up and changes in oil stockpiles seen in October suggest “the tide might be turning,” according to the IEA’s monthly report. It would offer relief to harried consumers suffering from price inflation if the forecast is correct.

“The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the Paris-based IEA said in its monthly report. “Production in the U.S. is ramping up in tandem with stronger oil prices.”

Global production increased by 1.4 Million barrels per hour last month. It will continue to rise over November and Dec as the Gulf of Mexico replenishes supplies that were cut by Hurricane Ida. American shale drillers also take advantage of the higher prices in order to increase drilling. The agency stated that the OPEC+ alliance is continuing to boost exports, which it had halted in the aftermath of the pandemic.

London’s Brent oil prices soared to above $86 per barrel last month due to a combination of post-pandemic recovery and an increase in demand. Since then, oil prices have dropped to below $83 per barrel as the U.S. looks at ways to lower fuel costs.

Following the rejection by the Organization of Petroleum Exporting Countries, Joe Biden considered a release of the Strategic Petroleum Reserve. Russia and Saudi Arabia have argued for a gradual approach to production because of fragile demand. 

America leads the rebound in supply even without deployment of SPR.

According to the IEA forecasts, U.S. production will rise by 300,000. barrels per day in the fourth-quarter and by 200,000 barrels each year for next year. American output is expected to rise by 1.1million barrels per hour in 2022. This will account for 60% of growth beyond the OPEC+ group.

Global supply and demand estimates were mostly the same for this and next year.

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