Oil Market Surplus Looms: IEA Predicts Larger Than Expected Oversupply

The International Energy Agency warns of an oversupply in the global oil market, with a potential surplus of up to 4.09 million barrels per day next year. Despite increased production from OPEC+ and others, demand growth remains modest. Oil prices are volatile, and inventories are rising.

The International Energy Agency (IEA) has projected a substantial surplus in the global oil market for next year, with production potentially exceeding demand by 4.09 million barrels per day (bpd). This development could represent nearly 4% of world demand and surpasses existing forecasts from other analysts.

OPEC+, which includes Russia and its allies, have ramped up production since April. As other producers like the U.S. and Brazil follow suit, concerns of an oil glut loom. The IEA's monthly report suggests that global oil supply growth is outpacing demand growth, which remains modest by historical standards.

Despite these predictions, oil prices showed a slight increase to $63 a barrel. Inventory levels have surged, with waterborne stocks rising significantly. The situation underscores the complexity of global oil dynamics as producers navigate market fluctuations and geopolitical challenges.

(With inputs from agencies.)