Global oil supply in August rose by 790,000 barrels per day (bpd) to 101.0 million bpd, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday.

A strong recovery in Libya and smaller gains from Saudi Arabia and the United Arab Emirates (UAE) mainly boosted production rises, although these gains were offset by losses in Nigeria, Kazakhstan and Russia, according to the agency.

“As for Russia, we expect the country’s supply to decline gradually, from almost 11 million bpd in August to 10.2 million bpd in December as the EU embargo comes into full effect,” the agency said, adding that Russia’s production in August was 1.2 million bpd below its quota, the first monthly decline since April.

Cautioning over the slowdown in output growth from August to December, the agency forecast that global production would rise by 4.8 million bpd in 2022 to 100.1 million bpd year over year and by 1.7 million bpd to 101.8 million bpd in 2023.

OPEC output rises in August

Daily crude oil production of the OPEC group rose to 29.72 million bpd in August, marking an increase of about 680,000 bpd compared to the previous month.

During this period, OPEC natural gas liquids were recorded as 5.37 million bpd, increasing OPEC's total oil production to 35.90 million bpd last month.

Non-OPEC production, led higher by the US, Brazil, Norway and Canada, increased by around 120,000 bpd to 66.21 million bpd in August.

OPEC+ spare capacity falls

According to the IEA, effective spare capacity of the OPEC+ group fell by just over 3 million bpd, with Saudi Arabia and the UAE between them holding the lion’s share.

Saudi crude production approached 11 million bpd in August – a level scaled only twice before - leaving it with 1.3 million bpd to spare. The UAE had roughly 700,000 bpd of idle capacity.

Global demand forecast revised down

The IEA revised down its global oil demand growth estimates by 110,000 bpd for 2022, weighed down by the faltering Chinese economy and an ongoing slowdown in OECD economies.

“Persistent demand weakness in China considerably slowed the pace of a summer ramp-up in refining activity. After reaching a post-Covid peak in August of 81.4 million bpd, refinery throughputs are expected to fall in September-October on seasonal maintenance,” the agency said.

Global oil demand is projected to average 99.7 million bpd in 2022, and is estimated to increase by 2 million barrels next year to reach 101.8 million bpd.