Global Oil Demand Surged in September

The world’s oil demand jumped in September by 1.4 million barrel per day (bpd) compared to August and by 1.8 million bpd from a year earlier, driven by higher consumption in the United States and Indonesia, the monthly report by the Joint Organizations Data Initiative (JODI) showed on Wednesday.

At the same time, global crude oil exports rose by 1.3 million bpd in September from August and by 1.5 million bpd compared to September last year, according to the most recent data self-reported by 44 countries to JODI and shared by the Riyadh-based International Energy Forum (IEF).

Global oil supply is rising this year after the OPEC+ group started unwinding in April a large part of its production cuts, while non-OPEC+ supply from the Americas is surging, too, thanks to increased output and exports from the United States, Brazil, Guyana, and Canada.

Global crude and product inventories went up in September from August, the JODI data showed, confirming estimates and other figures that global stocks are rising.

Crude inventories in the JODI reporting countries increased by 6.4 million barrels in September from a month earlier, while product inventories jumped by 23 million barrels, the data showed.

The inventory buildup, including in the United States in recent weeks, is weighing on oil prices which dipped by about 2.5% early on Wednesday, with the U.S. benchmark WTI trading at $59 a barrel and Brent at $63 per barrel.

The market can’t seem to shake off the fear of glut and prices have dropped in recent days even as the U.S. sanctions against Russia’s top producers and exporters, Rosneft and Lukoil, come into effect on Friday.

Oil is set to further drop into next year from current levels amid a large surplus on the market, with WTI Crude expected to average $53 per barrel in 2026, Goldman Sachs reckons.

By Michael Kern for Oilprice.com

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