Oil glut returns as high prices curb demand

The global oil market is returning to excess supply as high prices curb demand, despite ongoing Middle East export disruptions from the Iran war, analysts and traders said Friday. JP Morgan estimated the market returned to a surplus of 1.1 million barrels per day in September, widening to 1.4 million in October, while Goldman Sachs said global stocks did not decline in September-October after earlier falls. Both banks cited recovering Gulf flows, rising non-Gulf production, and weak demand. Gulf crude exports averaged 14 million barrels per day in October, about 86% of pre-war levels, though refined product exports lagged at just over half of normal volumes. Short-term Brent swaps show contango, indicating ample immediate supply, while futures for 2027 remain in backwardation.