Oil Flat As IEA Anticipates 2025 Surplus, Despite OPEC Cut Extensions

Meanwhile, Canada's oil giants will ramp up production in 2025: File Image/Pixabay

Oil prices declined minimally on Thursday as traders divided their attention between more expectations for inventory surpluses in 2025 and hope that the U.S. Federal Reserve will enact another rate cut, thus stimulating demand.

Brent settled down 11 cents to $73.41 per barrel, while West Texas Intermediate settled down 27 cents at $70.02.

The biggest influence in Thursday's trading was the International Energy Agency, which forecast a surplus of up to 1.4 million barrels per day (bpd) in 2025 despite the Organization of the Petroleum Exporting Countries (OPEC) extending its production cuts into the New Year.

However, the IEA also predicted higher demand growth thanks to China vowing to adopt "appropriately loose" monetary policy next year to encourage economic growth.

Robert Yawger, director of the energy futures division at Mizuho Securities USA, said, "We are swimming in oil and will be for some time," but he added that new sanctions against Russia by the European Union will allow some traders to maintain a bullish outlook.

Also expressing a bullish outlook on Thursday were Suncor Energy, Cenovus Energy, and Imperial Oil; the Canadian oil producing giants told media that they would undertake higher output in the New Year based on resilient demand for Canadian crude in U.S. and international markets.

Suncor plans to grow its total oil and gas production to between 810,000 and 840,000 bpd next year, up from its 2024 estimated range of 770,000 to 810,000 bpd.

Imperial's output will grow to between 433,000 and 456,000 bpd, and Cenovus forecast a 2025 production increase to an estimated range of between 805,000 and 845,000 bpd.

In other oil news on Thursday, Russia's state oil firm Rosneft agreed to supply nearly 500,000 bpd of crude to India's Reliance Industries in a 10-year deal said to be worth roughly $13 billion per year at current prices.

An Indian refining source told the press that "India's requirement for Russian oil is going to go up as long as there are no further tightening of sanctions."