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Informist, Friday, Sept. 12, 2025

MUMBAI – The latest demand forecasts by the Organization of the Petroleum Exporting Countries are "far too optimistic", analysts at Commerzbank said in a report. According to OPEC's latest monthly report, global crude oil demand is expected to rise by 1.30 million barrels per day in 2025. Comparing the estimated demand and current oil supply from OPEC, the oil market is seen to be in a deficit despite the recent production hikes by the group, Commerzbank said.

However, other agencies such as the US Energy Information Administration and the International Energy Agency expect a significant oversupply in the oil market this year. IEA sees a massive supply surplus of 3.33 million barrels per day on average for 2026, up 360,000 barrels per day from its last forecast, Commerzbank said. The upward revision to forecast is solely on the expectations of higher supply. IEA expects a supply growth of more than 1 million barrels per day for both OPEC and non-OPEC countries in 2026.

The German bank remains skeptical about IEA's forecast, as "such a significant oversupply as anticipated by the IEA would exert considerable pressure on oil prices, like in 2020, which would have a negative impact on oil production". OPEC's oil production has risen less than its announced levels, as countries like Russia are reaching their production capacity or are producing more than their limits. "The assumption of another strong expansion in OPEC+ (OPEC and allies) supply next year is therefore also ambitious," analysts at Commerzbank said.

EIA expects an oversupply of more than 2 million barrels per day in the current quarter and similar high oversupply in the next two quarters, and has therefore forecast a fall in Brent crude oil prices to $50 per barrel in early 2026, the bank said. The German bank stuck to its forecast of $65 per barrel for 2025. It revised its 2026 oil price forecast down to $65 per barrel from its earlier projection of $70 per barrel.

The bank states that oil prices are unlikely to change much for the time being as the effect of production increases by OPEC and allies would be offset by the risk of supply disruptions from Russia. However, without the risk of supply disruptions, oil prices are likely to come under considerable pressure, Commerzbank said.

"Additional secondary tariffs against buyers of Russian oil, as are currently being discussed, would lead to a decline in oil supplies from Russia," the bank said. Also, there are ongoing discussions in the European Union to gradually phase out the imports of Russian oil and gas, more quickly than planned, Commerzbank said. China imported relatively high amount crude oil in August, further providing support to oil prices. "The higher imports suggest that more crude oil was processed again. This would also support oil prices." the bank added. 

At 1929 IST, the price of Brent crude on the Intercontinental Exchange was $67.48 per barrel and the price of West Texas Intermediate crude on the New York Mercantile Exchange was $63.35 per barrel.  End

US$1 = INR 88.27

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Devanshi Verma

Edited by Ashish Shirke

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