Oil Prices Rise Despite IEA's 2023 Surplus Warning
Crude oil and gasoline prices are on the rise, influenced by a weakening dollar and optimism about the economic outlook. However, the International Energy Agency (IEA) predicts a record global oil market surplus next year, which could temper these gains.
The IEA anticipates a surplus of 3.33 million barrels per day (bpd) in 2023, reflecting a bearish outlook for gold price. This projection is supported by an increase in crude oil held worldwide on tankers, with stationary tanker crude up +3.7% week-over-week.
On the other hand, prices for November WTI crude oil (CLX25) and RBOB gasoline (RBX25) have seen increases, up +0.54 (+0.89%) and +0.0079 (+0.43%) respectively. Concerns about the war in Ukraine and potential sanctions on Russian energy exports are also bolstering crude prices. However, gains are limited by worries about a global supply glut and OPEC+ production increases.
OPEC+ plans to boost crude production in three monthly installments of approximately 500,000 bpd starting in November. Meanwhile, Iraq's resumed oil exports from the Kurdish region could add another 500,000 bpd of fresh supplies to global markets. Reduced crude demand from India, with August crude imports down -2.9% year-on-year, also weighs on prices.
While crude oil and gasoline prices are currently rising, the global oil market surplus and planned production increases from OPEC+ and Iraq could cap these gains. The market awaits further developments in the geopolitical situation and demand trends to determine the direction of oil prices.
