Analysis: IEA Sees Growing Global Stocks, Larger Surplus


   
Karim Bastati
DTN Analyst

   The International Energy Agency in its latest oil market report published 
Thursday called for an even larger oil surplus by the end of the year than in 
last month's report. While demand growth expectations for 2025 were raised by 
60,000 bpd to 740,000 bpd, OPEC's rapid unwinding of production curtailments 
led the agency to revise its supply growth forecast from 2.5 to 2.7 million 
bpd. These revisions led IEA to forecast an even larger oil surplus by the end 
of the year, expecting global oil inventories to grow by an average of 2.5 
million bpd in the second half of 2025.

   Global oil supply in August reached a record 106.9 million bpd, propelled by 
OPEC+ production hikes and non-OPEC output "hovering near all-time highs", 
according to the report. Despite calculations assuming OPEC+ production to rise 
at a slower pace than the producer group had committed to on paper, global 
inventories are still set to swell based on output growth from outside OPEC 
alone. In fact, the agency expects non-OPEC countries to account for 1.4 
million bpd, or more than half of the forecasted production growth for year.

   The agency expects global oil inventory builds to extend into 2026, 
forecasting production to grow by 2.1 million bpd to 107.9 million bpd, 
contrasted with demand growth of 700,000 bpd. A 200,000-bpd upward revision to 
2026 production and an unchanged demand growth figure translated to hiked 
surplus expectations next year.

   Today's IEA 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 but remained 
some 67 million bbls below the five-year average. 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.




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