Global oil supply growth will lead to larger surpluses, IEA says

The International Energy Agency (IEA) has raised its estimate of global oil supply growth for this year and next. Its demand forecast has also edged up, but remains relatively low, pointing to larger oil surpluses on the market. The organization said this today in its regular monthly report on the oil market. Stronger interest in China boosted demand in the third quarter.

Global oil supply is now expected to grow by about 3,1 million barrels per day this year and by 2,5 million barrels per day next year. In its previous estimate, the IEA forecast supply growth of three million barrels per day this year and 2,4 million barrels per day next year.

"The balance of the global oil market appears increasingly out of kilter, as global oil supply continues to advance while oil demand growth remains modest by historical standards," the IEA said.

Demand nevertheless rose in the third quarter, driven by stronger demand in China and an improving macroeconomic outlook, the agency said. According to its latest report, demand growth in the third quarter reached 920.000 barrels per day, compared with 430.000 barrels per day in the second quarter. This is also higher than the agency’s estimate in its October report, which put demand growth at 750.000 barrels per day.

With supply continuing to exceed demand, the IEA expects total oil supply in 2026 to be 4,09 million barrels per day higher than total demand. This is an increase from the projected surplus of 3,97 million barrels per day cited by the agency in its latest monthly report.