Crude oil prices have declined following an unexpected surge in US crude stockpiles and a pessimistic forecast from the International Energy Agency (IEA), according to ANZ. Brent crude oil futures decreased by 0.7 per cent overnight, settling at $US65.67 per barrel. Data from the Energy Information Administration revealed that US commercial crude inventories increased by 3.0 million barrels last week, reaching a two-month high.
The IEA’s recent monthly report cautioned that the oil market could face a record surplus in 2026. The report projected inventory increases of 2.96 million barrels per day, surpassing the average pace observed during the 2020 pandemic. This anticipated surplus is primarily attributed to a weakening demand growth rate, which is less than half of the 2023 rate, and an increase in non-OPEC supply, coupled with the return of OPEC+ output.
Despite the bearish outlook, the IEA highlighted that supply risks remain, particularly concerning sanctions on Russian exports. ANZ noted that geopolitical tensions continue to influence the market, with former US President Donald Trump threatening “very severe consequences” if Russia does not agree to a ceasefire. These ongoing geopolitical factors could potentially impact oil supply and market stability.
