WTI faces renewed downside pressure as IEA forecasts a global oil surplus

Traders Union
All News
Commodities
WTI bears target key support levels

IEA revises demand outlook as global supply rebounds

The main event on November 13 was the release of the International Energy Agency's monthly report, which significantly changed the outlook for the global oil market balance. The IEA forecasts a decline in global oil demand of approximately 2.68 million barrels per day in 2026, to 102.29 million, revising its previous estimate downward by 67,000 barrels per day.

Meanwhile, global oil supply increased by 2.3 million barrels per day in October to 105.4 million, driven by a faster recovery in exports from Persian Gulf countries. According to the agency's estimates, the global market will return to a supply surplus of approximately 1.7 million barrels per day in the fourth quarter, compared with a previously forecast deficit.

Notably, supply is recovering much faster than consumption, creating conditions for further inventory accumulation. The IEA also expects global supply to increase by 6.6 million barrels per day in 2027 to 108.1 million, while demand is projected to recover by approximately 2 million. This divergence weakens the medium-term outlook for oil prices.

Strategic reserve releases and higher U.S. inventories weigh on prices

Additional pressure comes from changes in oil refining activity and the prospect of further releases from strategic reserves. According to the IEA's November report, global refinery throughput fell by 1.3 million barrels per day in October to a seasonal low of 81.3 million, although the agency expects a recovery to 84.7 million by December.

Meanwhile, global oil inventories increased by 52 million barrels in October for the first time since June, primarily due to higher volumes of crude oil in transit by sea. Onshore inventories remain at multi-year lows, so the improvement in the overall balance has not yet eliminated tightness in the petroleum products market.

Additional attention is focused on plans by IEA member countries to release another 71 million barrels of crude oil and petroleum products from strategic reserves by the end of February 2027. Implementing these plans would help partially offset ongoing supply disruptions, particularly in the diesel market, although the impact on prices will depend on the timing and actual volumes released.

U.S. inventory data also proved unfavorable for oil buyers. According to the EIA report released on November 12, U.S. commercial crude oil inventories increased by 4.7 million barrels to 414.4 million in the week ended November 6, while analysts had expected a decline. Gasoline inventories rose by 1.8 million barrels to 210.8 million, while distillate stocks increased by 4.1 million to 103.3 million.

Meanwhile, U.S. oil production reached approximately 14 million barrels per day, while refinery utilization increased to 95.2%. Rising inventories alongside high refinery activity indicate a substantial recovery in supply, although commercial crude oil stocks remain approximately 4% below the five-year average.

Middle East risks remain as WTI tests key resistance

Uncertainty persists in the Middle East over the next steps by the U.S. and Iran. Washington intends to maintain restrictions on Iranian oil exports without ruling out a change in military strategy, while attacks on tankers and energy infrastructure continue to threaten supplies. As a result, the decline in the geopolitical risk premium embedded in oil prices could reverse if the conflict escalates again.

Thus, unless tensions in the Middle East escalate, pressure on WTI prices may persist, and the bears may continue their attempts to break through support around $86.5–85.5. A break above resistance at $89.5–90, as stated in WTI rebounds from recent lows as Middle East tensions sustain supply risks, would lead to a rise toward $91–92, where sellers may become more active.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.