IEA: Oil market to see a surplus next year

There will be a modest supply surplus on the global oil market next year, even if producers in the OPEC+ group extend the current production cuts. Toril Bosoni, head of the oil markets and industry division at the International Energy Agency (IEA), told Reuters. The market is currently in deficit, however, and oil stocks are falling rapidly, she said.

“Global oil stocks are at low levels, which means there is a heightened risk of volatility if there is a surprise on either the demand or supply side,” she said.

OPEC+ comprises members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia. The group is expected to consider whether to cut production again at a meeting later this month, sources from the group told Reuters.

Since the end of September, oil prices have fallen by around 16 percent. Brent crude fell to 82 dollars a barrel from this year's high of 98 dollars a barrel, reached in September. Prices have been weighed down by concerns about demand and a possible surplus next year. Neither the OPEC+ group's decision to limit production nor the conflict in the Middle East has eased those concerns.

Saudi Arabia, Russia and other OPEC+ members have already pledged total production cuts of 5.16 million barrels per day in a series of steps launched late last year. That represents roughly five percent of global daily demand. The cuts include a 3.66 million-barrel reduction by the entire OPEC+ group and additional voluntary cuts announced by Saudi Arabia and Russia.