ar
- OPEC+ expects global supply to match demand in 2026, marking a shift from earlier forecasts of shortages due to higher global production.
- Strong demand growth has been supported by steady economic growth and eased trade tensions.
- Rising inventories, a growing non-OPEC supply, and cautious production hikes have kept Brent prices steady near $64 as surplus concerns weigh on sentiment.
OPEC+ released its monthly outlook report yesterday, forecasting that global oil supply and demand will likely balance out towards a small surplus by 2026.
This marks a turnaround from prior forecasts warning of shortages, with the shift coming from production increases and more oil flowing into the market from other nations.
Demand Forecasts Stay Strong
OPEC+ left its forecasts for oil demand unchanged. Global demand is expected to grow by 1.3 million bpd (barrels per day) this year, and is expected to rise by 1.38 million bpd in 2026. Global economic growth forecasts were kept at 3% for 2025 and 3.1% for 2026, as easing trade tensions and loose monetary policies support growth. ⁽¹⁾
However, OPEC’s forecast for demand remains higher than the International Energy Agency (IEA), with OPEC’s outlook no longer implying a supply deficit in 2026, in contrast to the IEA and many analysts. ⁽²⁾
Expectations of a large deficit have made it easier for OPEC+ to justify increasing production to regain market share. However, Wednesday’s report shows that the difference between OPEC’s outlook and other analysts’ forecasts is becoming smaller.
Production Changes in OPEC+
In October, overall OPEC crude-oil production rose by only 33,000 barrels a day to 28.46 million barrels a day, driven by Saudi Arabia, Iraq and Kuwait. Total production by OPEC+ members fell by 73,000 barrels a day to 43.02 million barrels a day. ⁽³⁾
OPEC+ plans to also hike its production by 137,000 bpd in December, but will halt hikes in Q1 2026, stating caution. Saudi Arabia will cut prices for Asian buyers when buying oil in December. Only about half of the planned increases might reach the market. Some members overproduced in the past and must compensate, while others might face capacity limits. ⁽⁴⁾
Earlier on Wednesday, OPEC said it was pleased that the IEA now believes global oil demand could keep rising for many years, instead of falling soon. OPEC also said the IEA has finally accepted reality, that oil demand isn’t slowing down yet and will keep growing longer than it thought. ⁽⁵⁾
Inventories and Prices
Global oil inventories have risen since the start of 2025, especially the rise in non-OECD (Organization for Economic Co-operation and Development) inventories that was mainly driven by China. In OECD nations, inventories grew due to higher imports.
Brent crude remained steady around $64 per barrel after rising for three straight sessions, pressured by expectations of a growing global supply surplus. Prices were higher at the start of the week due to US sanctions on Russia, but oversupply worries have kept the outlook bearish. ⁽⁶⁾
Non-OPEC+ Supply Growth
Supply from non-OPEC+ members, such as the US, Canada and Brazil, is expected to increase by 920,000 bpd in 2025, surpassing earlier forecasts. Supply increases in 2026 are expected to come in around 630,000 bpd from non-OPEC+ members. ⁽⁷⁾
The US is expected to drive oil demand in the Americas region next year, driven by transportation fuels and petrochemical feedstock.
Looking Ahead
OPEC+’s latest outlook shows that the oil market is expected to move towards a balance between supply and demand in 2026. Increased production from both OPEC+ and non-OPEC+ countries, alongside their inventory surpluses, has changed the view from earlier deficit expectations.
The eight OPEC+ members currently engaged in supply adjustments, and the full 22-nation coalition, will hold meetings to review policy on November 30.
