IEA says global oil market returns to surplus this quarter

Market shifts to surplus status

According to the Paris-based agency, worldwide oil production is expected to reach an average of 105 million barrels daily during the last quarter of the year. This volume is 1.7 million barrels per day higher than forecast demand for that period. The report notes this marks the first time supplies have surpassed demand since the outbreak of war in Iran. Brent crude prices fell to $95.71 a barrel after the report was released at 0900 GMT on Friday.

Export recovery and reserve releases

Oil shipments from the Middle East are rebounding at a quicker pace than worldwide consumption, even as assaults on maritime craft persist in that area. Gulf producers are using workarounds like dark crossings through the Strait of Hormuz to evade tracking signals and avoid attacks. The agency said 71 million barrels from emergency reserves pledged in March will be available by the end of February. This includes 15 million barrels of diesel intended to ease current market tightness.

OPEC+ output and price context

The OPEC+ group pumped 41.23 million barrels per day of crude in October, which is up about 2.04 million barrels from September. This production level represents 97 percent of the pre-war February volume according to data released by the organization. Oil prices had risen from $72 a barrel in February before conflict began and hit $126 a barrel by April. Analysts note high prices have affected vehicle fuel markets while consumption is expected to fall this year.