(Bloomberg) — Global oil markets face a surplus of more than 1 million barrels per day next year as Chinese demand continues to weaken, shielding prices from unrest in the Middle East and beyond. beyond that, the International Energy Agency said.

Oil consumption in China – the powerhouse of global markets over the past two decades – contracted for six straight months through September and will increase this year at just 10% of the rate seen in 2023, the country said on Thursday. IEA in a monthly report. The global glut would be even bigger if OPEC+ decides to continue plans to restart halted production at its meeting next month, according to the agency.

Amid prolonged weakness in Chinese demand, crude oil prices have fallen 11% since the start of October despite continued hostilities between Israel and Iran, as traders focus their growing production on the Americas, the company said. ‘AIE, based in Paris. This decline suggests a “well-supplied market in 2025,” he adds.

“With supply risks ever-present, a looser balance would bring much-needed stability to a market upended by the Covid pandemic, Russia’s full-scale invasion of Ukraine and, more recently, intensifying unrest in the Middle East,” the agency said. Brent crude futures traded near $72 a barrel on Thursday.

Global oil consumption will increase by 920,000 barrels per day this year – less than half the rate seen in 2023 – to an average of 102.8 million per day, it says. Next year, demand will increase by 990,000 barrels per day.

“The growth pace of less than 1 million barrels per day for both years reflects below-average global economic conditions, with the post-pandemic release of pent-up demand now complete,” the report said. “The rapid deployment of clean energy technologies is also increasingly replacing oil in transportation and power generation. »

The agency, which advises major economies, predicted earlier this year that global demand would stop growing this decade, amid a shift away from fossil fuels to electric vehicles and renewable energy.

As demand growth slows, supply from producers such as the United States, Brazil, Canada and Guyana is expected to increase this year and next by 1.5 million barrels per day, forecasts ‘agency. As a result, global supply will exceed demand next year by more than a million barrels per day, even if the 23-nation OPEC+ cartel abandons plans to restore production.

The Organization of the Petroleum Exporting Countries and its allies sought to restart production interrupted since 2022, but were forced to delay this decision twice as the market remains fragile. It currently plans to begin a series of modest monthly increases with an increase of 180,000 barrels per day in January, and will meet on December 1 to review the decision.

The OPEC secretariat belatedly acknowledged the slowdown in demand, reducing its forecast for this year by 18% in four consecutive monthly cuts. Still, its forecast for growth of 1.8 million barrels per day remains roughly double the rate seen by the IEA and higher than most other market observers.

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