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The global oil market is facing a substantial surplus moving into the next year, with OPEC+ providing easily available spare capacity coupled with slowing demand, according to the IEA’s October Oil Market Report.

The report indicates that worldwide oil demand is set to increase by just 862,000 barrels per day (bpd) for the rest of this year as Chinese demand wanes.

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This latest estimate is noticeably below the 903,000bpd growth seen in September’s report.

The energy organisation said Chinese oil demand “is particularly weak” with August being its “fourth consecutive month of declines”.

Non-OPEC and OPEC+ supplies are continuing to gradually increase, and could exceed 1.5 million barrels per day (mbbl/d) this year and next, with the US, Brazil and Canada accounting for much of the increase.

OPEC+ spare production capacity remains unusually high, standing at more than 5mbbl/d in September, said the report.

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Back in July, the energy body said growing demand for energy and petrochemicals, coupled with ongoing energy security concerns, could prompt rising demand for oil into 2030, despite the rapid deployment of green energy, according to a GlobalData response to the IEA’s recent Oil 2024 report.

GlobalData is Offshore Technology’s parent company.

The IEA found at the time that oil markets face challenges as medium-term structural shifts are expected to cause excess supply in six years’ time, with green and energy-saving technologies helping to gradually slow the pace of oil demand growth. 

However, GlobalData analysts pointed out that overall energy demand continues to grow, and if carbon capture, utilisation and storage technology becomes more cost-effective, it could lessen the trade-off between oil production and climate goals.