DTN Oil Update
Oil Prices Soften After IEA Hikes Surplus Forecast
HOUSTON (DTN) -- Oil prices fell Thursday morning, after the International Energy Agency, in its oil market report published Thursday morning, called for an even larger oil surplus this year and next than in last month's report. IEA expected global oil inventories to grow by an average of 2.5 million barrels per day (bpd) in the second half of 2025, a pace the agency called "untenable".
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NYMEX-traded WTI for October delivery fell $0.89 to trade near $62.78 bbl, and ICE Brent for November delivery slid $0.87 to $66.62 bbl.
October RBOB gasoline futures slid $0.0311 to $1.9769 gal, and the front-month ULSD contract was down $0.0453 to $2.2884 gal.
The U.S. dollar index softened in response to a higher-than-expected inflation report, but was still up 0.118 points to 97.865 on the day.
While demand growth expectations for 2025 were raised by 60,000 bpd to 740,000 bpd, OPEC's rapid unwinding of production curtailments and solid non-OPEC output growth led the agency to revise its supply growth forecast from 2.5 to 2.7 million bpd, leading to hiked surplus expectations.
The report also highlighted global inventories growing for a sixth consecutive month in July, expanding by 26.5 million bbls last month. Global stocks have added 187 million bbls since the start of the year. Despite record production, preliminary data suggested inventories remained relatively unchanged in August as refinery crude oil throughputs surged to a record high 85.1 million bpd.
Adding to bearish sentiment, the agency expected global oil inventory builds to extend into 2026, forecasting production to grow by 2.1 million bpd to 107.9 million bpd, in contrast to demand growth of 700,000 bpd. A 200,000-bpd upward revision to 2026 production and an unchanged demand growth figure translated to a larger surplus than previously anticipated.