Trafigura: Global oil market is approaching a record surplus

The oil market will approach "super-oversupply" next year as a wave of new supplies could clash with weak demand, warns global commodity trader Trafigura, which is cited by refers to Bloomberg.

The International Energy Agency forecasts a record surplus of more than 4 million barrels per day – about 4% of global consumption.

"Whether it's a surplus or a super-surplus, it's hard to get rid of it," said Saad Rahim, chief economist at Trafigura.

Rahim explained that there are several reasons for this warning on the supply side: large oil projects launched many years ago are coming onto the market just as demand growth – especially in China – is noticeably slowing down.

According to him, the situation could be slightly mitigated by stable purchases from major importers, primarily China, as well as updated supply plans from the US and OPEC+ countries. This could at least delay the emergence of a surplus.

The mismatch between increased supply and weaker demand has already started to put pressure on the market. Prices are reacting accordingly: Brent has fallen by 16% since the beginning of the year and is now heading for its worst performance since the pandemic.

• For Ukraine, this could become a strategic advantage, as the fall in oil prices will directly hit Russia's budget, whose economy is already teetering on the brink of crisis.