On Thursday, the International Energy Agency (IEA) released a monthly report stating that despite OPEC+ deciding to delay production increases, the global oil market will still face a supply surplus next year.

This view contrasts with the report from the US Energy Information Administration (EIA), which believes that the global oil market will be roughly balanced next year.

The IEA has revised down its global oil demand growth forecast for 2024 by 0.08 million barrels to 0.84 million barrels, while raising the 2025 global oil demand growth forecast by 0.09 million barrels to 1.1 million barrels, primarily due to China's recently announced economic stimulus measures.

Brent crude oil prices have risen by more than 3% over the past three trading days, currently hovering around $73 per barrel.

Even if OPEC+ delays production increases, oil will still be in surplus next year.

On the supply side, the IEA's monthly report predicts that if OPEC+ starts implementing its production recovery plan in April, the global market will face a surplus of 1.4 million barrels per day. Even if OPEC+ completely cancels its production increase plans for next year, there will still be a surplus of 0.95 million barrels per day.

The IEA anticipates that global oil supply will increase by 0.63 million barrels per day in 2024 and by 1.9 million barrels per day in 2025. At that time, global oil consumption will reach 0.1039 billion barrels per day.

However, the Institutions expect that the supply from non-OPEC+ countries will increase by approximately 36%, with the largest increases coming from the USA, Brazil, Canada, and Guyana.

On the demand side, the IEA has lowered its oil demand growth forecast for this year by 0.08 million barrels per day to 0.84 million barrels per day, mainly due to "lower-than-expected oil production from non-OECD countries such as Saudi Arabia and Indonesia." The global oil demand growth forecast for 2025 has been raised by 0.09 million barrels to 1.1 million barrels, primarily due to China's recently announced economic stimulus measures.

The IEA stated that demand growth will be weak in the next two years, reflecting the "overall unfavorable macroeconomic environment and the changing patterns of oil usage." Petrochemical feedstocks will drive demand growth, while the demand for transportation fuels "will continue to be constrained by behavioral and technological advancements."

Warren Patterson, head of commodity strategy at ING Groep NV, stated:

"While we have seen oil prices strengthen in recent days, we still remain within a fairly narrow Range. Given the expectations for oil price balance in 2025, the fluctuation within this Range and low volatility are not surprising."

Editor/lambor