OPEC shifts oil outlook to see small surplus in 2026

By Alex Lawler

LONDON (Reuters) -The world oil market will see a small surplus in 2026 after OPEC+ production increases and higher supply from other producers, an OPEC report showed on Wednesday, a further shift from its earlier projections of a deficit.

The OPEC+ group comprising the Organization of the Petroleum Exporting Countries, Russia and other allies plans to pause production hikes in the first quarter of 2026 after widespread predictions of oversupply.

In a monthly report on Wednesday, OPEC said that OPEC+ pumped 43.02 million barrels per day in October, down 73,000 bpd from September despite the output increase agreement for the month, led by a drop in Kazakhstan.

Expected demand for OPEC+ crude at 43.0 million bpd in 2026 implies that the world market will show a small surplus of 20,000 bpd if the wider group keeps pumping at October's rate, according to a Reuters calculation based on the report.

This marks a further shift from OPEC's earlier projection of a deficit, which provided a more comfortable backdrop for raising production. Last month's report projected a deficit of 50,000 bpd and the September report a shortfall of 700,000 bpd.

Oil extended an earlier decline after the report was published and was down over 3% to about $63 a barrel.

LOWER DEMAND FOR OPEC+ CRUDE

OPEC lowered its 2026 demand forecast for OPEC+ crude by 100,000 bpd from the previous projection after an upward revision to its 2025 estimates for production outside OPEC+.

OPEC's demand forecasts are at the higher end of industry estimates, such as those from the International Energy Agency. OPEC's outlook for a supply deficit in 2026 stood in contrast to that of the IEA and many analysts.

There is still a large gap between OPEC's projections and those of other forecasters, which expect supply to outpace demand significantly next year.

IEA EXPECTS A GLUT

The IEA's latest forecasts imply that supply could exceed demand by about 4 million bpd in 2026, equal to almost 4% of global demand. The agency, which advises industrialised countries, is scheduled to update its forecasts on Thursday.     

OPEC also said the global economy's growth trend remained firm and it maintained its forecasts for global oil demand to rise by 1.3 million bpd this year and at a slightly faster rate in 2026. 

"The global economy has remained resilient through 2025, supported by easing trade uncertainty since the summer," OPEC said in the report.

(Reporting by Alex Lawler. Editing by David Goodman and Mark Potter)