DTN Oil Update
Oil Futures Fall Driven by IEA's Ample Supply Forecast
HOUSTON (DTN)-- Oil futures prices settled lower on Thursday, retreating gains from the previous trading session, driven by expectations of ample supplies after the International Energy Agency (IEA) forecasted a larger oil surplus this year and in 2026 compared to its report last month. The bearish tone was supported by Energy Information Administration data showing a build of U.S. inventories last week.
IEA expected global oil inventories to grow by an average of 2.5 million bpd in the second half of 2025, a pace the agency called "untenable" in its monthly report released on Thursday.
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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 bbl last month. Global stocks have increased 187 million bbl 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.
On Wednesday, the EIA reported U.S. commercial crude oil inventories rose by 2.4 million barrels to 420.7 million bbl last week, up 0.6% year-on-year and 4% below the five-year seasonal average. The weekly increase was almost entirely centered on Cushing, Oklahoma, the delivery point for WTI futures. While crude oil exports and refinery throughput were little changed, imports jumped 508,000 bpd to a three-week high of 6.742 million bpd in the week ending August 29.
The NYMEX WTI futures contract for October delivery fell by $1.37 to $62.30 bbl while the front-month ICE Brent for November delivery dropped by $0.67 to $66.03 bbl.
October RBOB gasoline futures decreased by $0.0373 to $1.9707 gallon and the front-month ULSD futures contract dropped by $0.0563 to $2.2774 gallon.
The U.S. Dollar Index softened by 0.247 points to 97.500 against a basket of foreign currencies.
