Oil Market Tightens Despite Oversupply Projections

The International Energy Agency (IEA) has revised its global oil supply growth forecast upward to 2.1 million barrels per day, a 300,000-barrel increase from prior estimates. Simultaneously, demand growth projections were trimmed to 700,000 barrels daily, creating a theoretical oversupply gap.

Market fundamentals tell a different story. Refining activity has intensified due to summer travel demand and elevated power-generation needs, eroding spare capacity. OPEC+'s recent decision to accelerate production cut rollbacks failed to alleviate market tightness, with Brent crude holding steady NEAR $69 after briefly spiking to $70.

Price indicators reveal underlying strain. Firm refining margins and backwardation in forward curves contradict headline supply figures. Energy ministers and industry executives concur, noting robust demand continues to absorb additional barrels without significant inventory builds.