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Why Oil Returned to Surplus While Prices Stayed Volatile
JPMorgan estimated a global oil surplus of 1.1 million barrels per day in September and 1.4 million in October, close to last year’s 1.3 million average.
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- JPMorgan estimated a global oil surplus of 1.1 million barrels per day in September and 1.4 million in October, close to last year’s 1.3 million average.
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openai.comCreate a landscape editorial hero image for this Studio Global article: How did JPMorgan’s Nov. 4 assessment explain the global oil market’s return to surplus after months of Middle East conflict—including Septem. Article summary: JPMorgan’s Nov. 4 assessment described recovering supply and weaker demand pushing the oil market back into surplus—not a complete restoration of pre-war energy security. That can coexist with expensive, volatile oil bec. Topic tags: general, general web, news, user generated. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts w
JPMorgan’s November 4 assessment pointed to two forces pushing oil supply above demand: recovering exports and weaker consumption. It estimated a surplus of 1.1 million barrels per day in September, widening to 1.4 million in October—nearly matching last year’s 1.3 million average. But a monthly surplus does not mean the supply shock is over: global inventories remained far below their pre-conflict level, and shipping risks persisted. 3
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What brought the market back into surplus
Middle Eastern exports had rebounded from a March low of 9.8 million barrels per day to about 20.7 million, while global oil demand had fallen by 3.3 million barrels per day since the conflict began, according to figures reported alongside JPMorgan’s assessment. 13 Rising production in Latin America also added to returning supply, though the available reporting does not establish the specific 1.5 million-barrel increase or a breakdown by country.
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Trade flows offered another sign that more crude was moving through the market. Global crude imports reached 44.9 million barrels per day in October, 1.3 million higher than a year earlier, Reuters reported. Imports are evidence of changing deliveries, but on their own they do not show whether barrels were consumed or put into storage. 5
Why a surplus did not mean stocks were replenished
A surplus describes the balance between supply and demand over a period; inventories are the accumulated reserve built up or drawn down over time. The distinction matters after months of disruption. The International Energy Agency reported that global observed inventories at the end of September were 509 million barrels below their end-February level. On-land stocks were at their lowest level since at least 2016. 42
So even if supply is now running ahead of consumption, it would take time for that flow to rebuild the stock cushion. The outlook is also not unanimous: reporting on JPMorgan’s estimate said it diverged from the IEA’s forecast of continued deficits through the end of the year. 6
Why prices could still swing sharply
Oil prices respond not only to the latest estimated balance but also to expectations about future supply. A tanker attack in the Strait of Hormuz highlighted the risk that shipments could be disrupted again; Reuters reported Brent rose 2.4% on October 30 amid concerns about escalation. 18 Diplomacy and US politics also moved market expectations. On November 4, Reuters described volatile trading as investors waited for Washington’s next move on Iran after Democrats won control of Congress.
16 A separate report that day recorded Brent falling 8.9% as traders weighed the prospect of an end to the conflict.
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Goldman Sachs’ forecast was another measure of future risk, not a contradiction of JPMorgan’s estimate of a current surplus. Goldman raised its December Brent forecast to $105 a barrel from $90 and put its 2027 average forecast at $88, citing elevated supply risks. 32
The practical takeaway: flows and resilience both matter
The surplus estimate suggests that the immediate supply-demand balance had eased. It does not establish that inventories have recovered, that exports are secure, or that oil prices will move steadily lower. ADNOC chief Sultan Al Jaber’s call for more storage and fuel production closer to consumers reflects the same distinction: energy security depends not just on how much oil is produced, but on whether it can be stored and delivered through disruption. 48
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JPMorgan estimated a global oil surplus of 1.1 million barrels per day in September and 1.4 million in October, close to last year’s 1.3 million average.