WTI Crude Oil Drops as IEA, OPEC Issue Warnings About Oversupply

WTI erases early-week gains as it drops over 2% to trade at $62.20. In August, OPEC+ production increased by 509,000 barrels per day, reaching 42.4 million barrels per day. The IEA lowers its demand prediction to 740,000 bpd and warns of a 2.5 million bpd global surplus in H2 2025.

As investors react to consecutive bearish signals from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) monthly reports, West Texas Intermediate (WTI) Crude Oil is once again under selling pressure on Wednesday, reversing the majority of the gains made earlier this week.

WTI is currently trading at about $62.20 per barrel, down almost 2.0% for the day after hitting a weekly high of about $63.80.

The September OPEC Monthly Oil Market Report (MOMR) noted a dramatic rise in crude production by OPEC+ nations, but it also predicted that the growth in global oil demand would stay stable at 1.3 million barrels per day in 2025. The study claims that in August, OPEC+ production increased by 509,000 barrels per day, reaching 42.4 million barrels per day. For the first time in months, hedge funds went net short on NYMEX WTI futures, which increased the downward pressure.

A possible global surplus of 2.5 million barrels per day in H2 2025 was also mentioned in the IEA’s September Oil Market Report, which was published earlier on Thursday. This was due to rising output from the US, Brazil, Canada, and OPEC+ countries. Citing weaker refinery margins in Asia and declining consumption trends in advanced economies, the agency reduced its demand growth prediction to just 740,000 barrels per day.

According to new statistics issued by the US Energy Information Administration (EIA) on Wednesday, U.S. crude stockpiles unexpectedly increased by 3.9 million barrels last week, highlighting weak end-of-summer demand. Stocks of distillate and gasoline also increased, indicating that downstream use is still modest.