IEA Forecasts Global Oil Surplus in Fourth Quarter
The International Energy Agency expects global oil supply to average 105 million barrels a day in the fourth quarter, exceeding forecast demand by 1.7 million barrels a day. Recovering Gulf exports and demand dampened by high oil prices are shifting the market toward a surplus.
In its monthly report released on November 13, the International Energy Agency (IEA) forecast that global oil supply would average 105 million barrels a day in the fourth quarter, 1.7 million barrels a day above projected demand. The agency had previously expected a supply shortfall during the period. The revised forecast reflects supply growing faster than demand.
Gulf oil producers are restoring exports disrupted by the conflict in the Middle East. OPEC and its allies reported on November 11 that their crude oil output averaged 41.23 million barrels a day in October, up about 2 million barrels a day from September and back to 97% of its pre-conflict level. The IEA said the oil market was showing signs of rebalancing, even as the conflict continued.
On the demand side, the IEA said high oil prices had curbed consumption this year. It forecast that global oil demand would fall by 2.7 million barrels a day over the year to an average of 102.3 million barrels a day. The agency also expects combined oil output from the United States, Canada, Brazil, Argentina and Guyana to rise by 1.6 million barrels a day this year. JPMorgan had previously estimated a global oil surplus of 1.4 million barrels a day in October.
Looking ahead to 2027, the IEA expects global oil supply to exceed 108 million barrels a day as Gulf production continues to recover, leaving a surplus of about 3.8 million barrels a day. The agency also said that, under an emergency reserve release agreed by its members in March this year, another 71 million barrels of oil will be released by February 2027, including 15 million barrels of diesel.
Source: VietVance
