The global oil market is heading for a "super-oversupply" next year due to a significant increase in supply that could face weak demand. This was warned by one of the world's largest commodity traders, Trafigura, to Bloomberg, writes UNN.
Details
According to the International Energy Agency (IEA), a record surplus of more than 4 million barrels per day, which is about 4% of global consumption, is expected next year. Although analysts suggest that in practice this figure may be smaller, a significant oversupply is still predicted.
As Saad Rahim, Trafigura's chief economist, explained, new large oil projects planned years ago are starting just as demand growth, particularly in China, is slowing down.
Whether it's a surplus or a super-surplus, it's hard to get rid of it
The mismatch between rising supply and falling demand is already negatively affecting prices. In particular, the price of Brent crude oil has fallen by 16% this year, putting it on track for its worst annual performance since the pandemic.
According to Rahim, significant purchases by large importers and adjusted supply plans from the US and OPEC+ countries can only delay or mitigate the expected market surplus.
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