Oil: Surplus environment – ING

FXStreet Insights Team FXStreet

Oil prices couldn’t escape a broader risk-off move amid intense selling of US equities and global growth concerns. ICE Brent settled a little more than 1.5% down on the day. A somewhat bearish release from the International Energy Agency (IEA) hardly helped, ING's commodity experts Ewa Manthey and Warren Patterson note.

Non-OPEC+ supply is forecast to grow by around 1.5m b/d this year

"In its latest monthly oil market report, the IEA highlighted risks that trade and tariff uncertainty pose to oil demand. The agency expects global oil demand to grow by a bit over 1m b/d in 2025. The IEA marginally revised lower demand growth estimates for the fourth quarter of 2024 and the first quarter of 2025."

"It estimates that global oil supply grew by 240k b/d in February as OPEC+, and in particular Kazakhstan, saw output hit a record high. Non-OPEC+ supply is forecast to grow by around 1.5m b/d this year, while OPEC+ supply depends on what the group does with supply cuts after April. The IEA forecasts that the global oil market will be in a 600k b/d surplus in 2025. There’s a risk that this will grow to 1m b/d if OPEC+ unwind cuts through the year."

"The ICE gasoil crack continues to come under pressure, trading below US$17/bbl and to its lowest level this year. Improved middle distillate flows through the Suez Canal supported the move lower in the crack. However, further weakness may be limited given that Amsterdam-Rotterdam-Antwerp (ARA) gasoil stocks have declined for 5 consecutive weeks, falling by 95kt over the last week to 2.27mt."

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