Brent crude futures traded near $96 a barrel on Friday, holding steady after the International Energy Agency (IEA) reported that global oil supply has exceeded demand for the first time since the start of the Iran war. The January contract was at $95.77 by 09:50 GMT, nearly unchanged from Thursday's settlement of $95.82, with intraday trading ranging between $95.07 and $96.75.
The U.S. benchmark West Texas Intermediate (WTI) for December delivery slipped 0.3% to $88.45, down from $88.74. Despite a 3.3% gain on Thursday, Brent remains 2.4% below last Friday's close of $98.32, putting it on track for a second consecutive weekly decline following a 16% slump the previous week.
IEA's November Report Highlights Rebalancing
In its monthly Oil Market Report, the Paris-based agency noted that "the oil market is showing tentative signs of rebalancing." Global supply rose by 2.3 million barrels per day (mb/d) to 105.4 mb/d in October, following a 3 mb/d jump in September, driven by higher Gulf exports despite ongoing attacks on tankers. Gulf exports, excluding Oman, reached 18.4 mb/d, still 26% below pre-war levels.
The IEA raised its fourth-quarter supply estimate by 3.3 mb/d and now expects supply to fall by 4.8 mb/d in 2026, compared with a 5.8 mb/d decline forecast in October. It also trimmed its 2027 supply growth forecast to 6.6 mb/d, reaching 108.1 mb/d, down from 7.7 mb/d a month ago, citing constrained Iranian shipments.
On the demand side, the agency slightly lowered its outlook. World oil demand is now projected to decline by 2.7 mb/d this year to 102.3 mb/d, versus October's estimate of a 2.6 mb/d drop to 102.4 mb/d. The IEA maintained its forecast of a 2 mb/d rebound in 2027, with demand returning to growth around March.
Inventories Rise for First Time Since June
Observed global oil inventories increased by 52 million barrels, or 1.7 mb/d, in October, marking the first build since June. Oil on water surged by 86 million barrels to its highest level since January, while on-land stocks continued to decline and remain at their lowest since at least 2016. This follows a 10 million-barrel draw in September, and cumulative observed stocks are still down 462 million barrels since the war began.
The agency's balances point to a surplus in the fourth quarter and a larger build in 2027. North Sea Dated crude has tumbled 32% from a high of $136 a barrel on October 8 to $93 at the time of writing, though that is still $22 above pre-war levels. European diesel prices fell 11% over the same period but remain 77% above pre-war levels at close to $180 a barrel.
Market Drivers and Risks
President Donald Trump said on Truth Social that a deal with Iran was not necessary to end the war, signaling he will maintain the blockade on Iranian oil shipments, according to Reuters. In a separate interview, Trump said he may use force against Iran "right now" if U.S. allies and ships are threatened, as reported by Anadolu Agency.
U.S. crude inventories rose by 4.7 million barrels to 414.4 million barrels in the week ended November 6, the Energy Information Administration said on Thursday, contrary to analysts' expectations of a 1.1 million-barrel draw. Shipping risks persist, with Iran's military reporting explosions on four oil tankers in the Strait of Hormuz and Yemen's Houthis claiming attacks on Saudi oil facilities, though Reuters could not independently verify these accounts.
Outlook
The IEA said attacks on shipping remain a risk to its forecasts, as maritime security is pivotal to a sustained recovery. The agency also flagged an accelerated release of emergency diesel stocks. The next Oil Market Report is due on December 11.
The IEA's report suggests the crude market is loosening as Gulf barrels return, while low on-land stocks and tight diesel supply keep prices well above pre-war levels. Iran headlines can still move Brent by several dollars a day, and traders should monitor geopolitical developments closely.
This article is for informational purposes only and does not constitute financial advice.
