Oil: OPEC’s cold shower. Prices are falling due to surplus fears, but the IEA sees things differently.

12 November 20253 months babelfish

Oil markets had a red day. Crude oil prices fell more than 2% on Wednesday, weighed down by a change in outlook, or perhaps mood, from OPEC . Brent crude slipped to $63.81 a barrel, while U.S. West Texas Intermediate (WTI) fell below the psychological $60 threshold, settling at $59.68.

Here is the WTI

and here is the Brent:

The trigger for this sell-off was a new projection from the Organization of the Petroleum Exporting Countries. In a move that revises previous estimates, OPEC announced that global oil supply will equal demand in 2026. This represents a U-turn from previous forecasts, which indicated a potential supply deficit for that year.

Simply put: OPEC is telling us that there will be enough oil to go around, perhaps even too much.

The odd couple: OPEC and IEA at odds

As in any good cheap comedy, as soon as one actor makes a prediction, another is ready to contradict it.

Just today, the International Energy Agency (IEA) released its long-awaited annual World Energy Outlook . And its vision is decidedly different: the IEA predicts that oil and gas demand could continue to grow until 2050.

The most interesting aspect (and perhaps a little ironic, in the style of Scenarios ) is the reason for this change by the IEA. The agency seems to have abandoned, at least in part, forecasts based on " climate pledges" (often more aspirational than actual) to return to a more pragmatic method, based exclusively on existing policies . This dose of realism pushes "peak demand" much further in the future.

The technical picture: what the numbers say

Beyond long-term projections, the market today looks to the present, and the present speaks of oversupply .

3Q Revision: The OPEC Secretariat now expects a surplus for the third quarter (3Q) as well, although, as UBS analyst Giovanni Staunovo notes, “it is still much smaller than the EIA and IEA.”
OPEC+ Action: This fear of oversupply is why OPEC+ (the broader group that includes Russia) has already agreed to pause production increases for the first quarter of next year, after reinstating cuts since August.

On the demand front, a small positive factor comes from the United States. The Republican-controlled House of Representatives is expected to vote today on a bill (already approved by the Senate) to refinance government agencies through January 30, averting a shutdown . According to IG Markets analyst Tony Sycamore, this could boost consumer confidence and economic activity, thus stimulating demand for crude oil.

However, for today, the fog of conflicting forecasts dictates the law, and the market has chosen caution (and bearishness).

Questions and Answers

Why did the IEA change its oil demand forecast, saying it will grow until 2050? The IEA has changed its forecasting methodology. Instead of relying on "climate commitments" (often just political pronouncements), the new World Energy Outlook relies on "existing policies," meaning the laws and measures currently in place. This approach, considered more realistic, shows that the energy transition is not fast enough to halt the growth in hydrocarbon demand, which would therefore continue to rise for decades, especially in developing countries.
What does OPEC's projected "surplus" mean for gasoline prices? A surplus (excess supply) means there is more oil on the market than consumers demand. According to the law of supply and demand, this puts downward pressure on crude oil prices. If oil prices decline significantly and sustainably, as seen today, in the medium term this generally translates into lower pump prices for gasoline and diesel, although local taxes and excise duties significantly mitigate the effect.
Why did OPEC change its outlook for 2026, moving from a "deficit" to a "surplus"? OPEC revised its forecasts for oil demand growth for two key reasons. First, it slightly lowered its forecasts for oil demand growth. Second, it raised its forecasts for supply from non- OPEC+ countries (such as the US, Brazil, and Guyana). Combining slightly weaker demand and stronger competing production, the market, which previously appeared to be in deficit (demand > supply), now appears to be in balance or even in a slight surplus (supply > demand) for 2026.

The article "Oil: OPEC's Cold Shower." Prices are falling due to surplus fears, but the IEA sees things differently. It comes from Scenari Economici .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-la-doccia-fredda-dellopec-prezzi-giu-per-timori-di-surplus-ma-liea-la-vede-diversamente/ on Wed, 12 Nov 2025 19:28:46 +0000.