IEA Sees Hefty Surplus in Q1 as Refiners Enter Maintenance


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- The International Energy Agency in its latest monthly oil 
report published Wednesday (1/21) maintained its view of a significant oil 
surplus emerging in the first quarter of 2026.

   The agency raised its world supply growth forecast by 100,000 bpd from 
December's report to 2.5 million bpd. IEA also revised higher the demand growth 
forecast for 2026 by 70,000 bpd to 930,000 bpd on the back of normalizing 
economic conditions. These latest estimates imply a global oil surplus of 3.69 
million bpd in 2026.

   The Paris-based energy watchdog reported global supply falling for a third 
consecutive month in December, as a jump in Russian output failed to make up 
for outages in Kazakh production.

   Despite soaring refinery throughput, up 2 million bpd month-on-month, global 
inventories continued to expand. Global observed inventories surged by 2.5 
million bpd in November for the tenth month in a row, mostly in crude oil 
onshore stocks. Preliminary data indicated that the inventory build extended 
into December, led by refined products.

   Refiners in the U.S., Europe, the Middle East and Asia increased run rates 
ahead of spring maintenance season. Refining margins slumped throughout last 
month as European middle distillate prices normalized.

   Barring major supply disruptions, global oil inventories are bound to swell 
in the first quarter as refining throughput enters its seasonal trough.




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