Global oil supplies surpassed demand for the first time since the outbreak of the war in Iran, lifting observed inventories by 52 mb in October as Gulf exports recovered faster than global oil demand.
Market Rebalancing Starts
Observed oil inventories rose by 52 mb, or 1.7 mb/d, in October. Falling by upwards of 30% from an 8 October peak of $136/bbl, North Sea Dated crude oil prices tumbled to near $93/bbl, while still sitting $22/bbl higher than values seen before the conflict.
Global oil supplies surged by 2.3 mb/d to reach 105.4 mb/d in October. This growth lifted total output by 5.3 mb/d since August.
Gulf oil exports fall despite rising Americas production
Gulf oil exports, excluding Oman, reached 18.4 mb/d last month despite continued attacks on tankers. This volume sits 26% below pre-war levels, while crude flows rose to 15 mb/d.
Producers outside the Gulf helped offset losses from the Middle East and Russia. The Americas Quintet, consisting of the United States, Canada, Brazil, Argentina, and Guyana, is on track to boost output by 1.6 mb/d this year.
US soya bean harvest leads and China imports drop
88% of the US soya bean harvest was complete by 1 November, which sits ahead of the five-year average. Brazil’s 2026 soya bean planting reached 65% of the intended area by 6 November.
Brent crude prices weaken as global supply grows
Nearby Brent crude oil weakened over the week to close at $98.32/barrel, down $15.11/barrel Friday to Friday. Concerns over supply disruptions eased following progress in US-Iran discussions.
Global supply is projected to recover by 6.6 mb/d to 108.1 mb/d in 2027. This growth includes a 5.3 mb/d increase in Gulf production and a 1.1 mb/d gain from the Americas Quintet.
How much did prices drop and harvests progress?
How much did North Sea Dated crude prices drop from their peak?
Dropping down toward $93/bbl, North Sea Dated crude prices declined by more than 30% relative to their 8 October high of $136/bbl.
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