Oil prices extended declines with ICE Brent trading just below $66/bbl this morning, amid softening demand and persistent concerns over a looming global supply surplus. However, escalating geopolitical tensions, following Israel's attack on Hamas's leadership in Qatar and prospects of tighter Western sanctions on Russian energy exports, might help put a floor under oil prices, ING's commodity experts Ewa Manthey and Warren Patterson note.

IEA expects a record oil surplus

"In its latest monthly oil market report, the IEA expects a record oil surplus of more than 3m b/d in 2026 amid cooling demand growth in China and increasing supply. The agency sees muted demand growth, a rise of 740k b/d this year, up marginally from its previous forecast. The IEA attributes this to limited growth from emerging economies and falling demand in industrialised nations over the latter half of the year. Looking ahead to 2026, global oil demand is forecast to grow by around 700k b/d year-on-year. However, the IEA also revised up its oil supply growth estimates primarily due to the return of OPEC+ supply. The agency now forecasts global supply will grow by 2.7m b/d YoY this year, and by a further 2.1m b/d in 2026."

"In its monthly oil market report, OPEC made no changes to its demand forecasts and continues to expect consumption to grow by 1.3m b/d this year and 1.4m b/d in 2026. Meanwhile, the group expects supply from producers outside the wider OPEC+ alliance to rise by 810k b/d this year and 630k b/d in 2026, unchanged from previous projections. OPEC continued to project a substantial supply deficit in global oil markets this year and next, even as the group revives production - a view that contrasts with the wider industry surplus expectations. Meanwhile, the release also shows that OPEC increased supply by 478k b/d month on month to 27.95m b/d in August. Saudi Arabia and Iraq drove most of the increase."

"Insights Global data shows that refined product inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region increased by 218kt week-on-week to 6.2mt for the week ending 11 September 2025. The rise was largely driven by naphtha and gasoil inventories rising by 89kt and 44kt to 667kt and 2.2kt, respectively. Similarly, fuel oil stocks rose by 35kt WoW to 1.04mt, while gasoline stocks increased by 29kt WoW to 1.2mt over the reporting week."