On October 28, "crude oil oversupply" has become the prevailing sentiment among traders and analysts in the global energy market. Nearly all institutions are forecasting an oil supply glut, though opinions differ on its scale. Moneta Markets FX suggests that this pessimistic outlook stems from overlapping projections by multiple authoritative agencies, yet uncertainties in the data remain. The International Energy Agency (IEA) recently acknowledged an unexplained gap of approximately 1.47 million barrels per day in global crude supply, raising new questions about this "missing oil" phenomenon.

Last week, the IEA further fueled concerns about oversupply, projecting a global surplus of around 2.35 million barrels per day this year, potentially reaching a record 4 million barrels per day by 2026. However, the same report noted that the untracked 1.47 million barrels per day casts doubt on the accuracy of these forecasts, indicating that actual global crude supply-demand dynamics may be more complex than anticipated. Moneta Markets FX highlights that the "missing oil" estimate has risen from 370,000 barrels per day in Q2 to 850,000 in July and 1.47 million in August, suggesting either expanding statistical discrepancies or underestimated supply volatility.

Meanwhile, other agencies are revising their medium-to-long-term supply-demand outlooks. BloombergNEF raised its 2026 surplus forecast to 3.3 million barrels per day, despite projecting a 1.16 million-barrel surplus this year—a contradictory logic, as oversupply typically suppresses prices and drilling activity, leading to production cuts rather than capacity expansion. The U.S. Energy Information Administration (EIA) expects this year’s surplus at 1.9 million barrels per day, potentially rising to 2.1 million by 2026, both upward revisions. Moneta Markets FX argues these adjustments reflect ongoing divergence in assessing future supply elasticity and demand recovery.

Market sentiment remains cautious, with Bloomberg reporting about 1 billion barrels of crude in transit at sea—some still seeking buyers—indicating persistent supply pressure. Stalled Middle Eastern crude sales are also seen as a sign of loosening supply-demand balance. Yet IEA data shows floating storage fell by 8 million barrels per day in August before rebounding sharply to 102 million in September, underscoring extreme volatility. Moneta Markets FX believes such short-term inventory swings may amplify psychological expectations of "oversupply."

Despite this, oil prices have recently edged higher. Some analysts attribute this to market fatigue with "glut narratives," as investors question overly bearish forecasts. UBS analyst Staunovo noted, "While supply concerns have resurfaced, we view the market as only slightly oversupplied, not truly stagnant." Geopolitical risks and supply security from major producers also lend price support, maintaining market sensitivity. Moneta Markets FX observes that if the severe surpluses predicted by the IEA and EIA materialized, geopolitical supply risks would have limited price impact. Instead, persistent market sensitivity to disruptions suggests the "oil glut" narrative may lack solid grounding.

Overall, Moneta Markets FX concludes that the oil market is navigating a phase where "data and sentiment" intertwine. While short-term oversupply fears dominate, actual supply gaps and inventory fluctuations indicate prices may still be driven by sentiment and geopolitical events. Investors should remain wary of "false surplus" signals and focus on underlying supply-demand fundamentals amid volatility.