The International Energy Agency (IEA) Tuesday lifted its oil demand growth forecasts for this year and next despite an anticipated slowdown in economic growth in nearly all major economies.

Although voluntary supply cuts from Saudi Arabia and Russia until the end of the year will keep supply tight, with demand growth still set to slow, the market could shift into surplus at the start of 2024, the Paris-based agency said.

While overall economic and oil demand growth is expected to lose steam next year, demand in 2023 has been supported by resilient U.S. deliveries and record September demand from China.

Expectations for 2024, meanwhile, are underpinned by hopes of interest rate cuts and the recent fall in crude prices, the IEA, the energy adviser to industrialized nations, added.

"For now, with demand still exceeding available supplies heading into the Northern Hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks – and further volatility ahead."

Brent oil prices have weakened to around $82 a barrel from a 2023 high in September near $98. Concern about economic growth and demand has weighed on prices, despite support from supply cuts by OPEC and its allies, and conflict in the Middle East.

For 2023, the IEA raised its growth forecast to 2.4 million barrels per day (bpd) from 2.3 million bpd and moved closer to the Organization of the Petroleum Exporting Countries (OPEC's) forecast of 2.46 million bpd.

For 2024, the IEA raised its growth forecast to 930,000 bpd from 880,000 bpd, still well below OPEC's forecast of 2.25 million bpd.