The Carlyle Group's Jeff Currie says the oil and metals markets are “substantially underinvested” and have significant upside. “If you are having to scrape the data to find evidence of the glut, it is not an oil supply glut,” Currie said on "Bloomberg The Close." -------- More on Bloomberg Television and Markets Like this video? Subscribe and turn on notifications so you don't miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9 Visit http://www.bloomberg.com for business news & an ...

Core Viewpoint - The international crude oil prices have dropped to near five-year lows due to a global supply surplus, which may help slow production growth and boost demand, potentially alleviating the expected supply surplus by 2026 [1] Group 1: Current Market Conditions - As of December 12, the active oil rig count in the U.S. has decreased by approximately 14% compared to the same period last year, indicating a potential reduction in supply [1] - The WTI crude oil contract for January delivery closed at $55.27 per barrel, while the Brent crude contract for February delivery closed at $58.92 per barrel, marking the lowest levels since February 2021 [2] - The decline in oil prices this year is primarily attributed to a supply surplus combined with weak market sentiment, exacerbated by OPEC+ policies [2] Group 2: OPEC+ Influence - OPEC+ has accelerated the increase of production quotas earlier and faster than expected, contributing to the oversupply in the market and driving down oil prices [4] - Non-OPEC supply, particularly from the U.S., has remained strong due to improved efficiency among shale oil producers, further expanding the supply surplus [4] - OPEC+ aims to prevent further loss of market share and address the issue of excess idle capacity, which is projected to be 4.6 million barrels per day in 2024, more than double the 2.3 million barrels per day in 2023 [4] Group 3: Future Outlook - The expectation of continued global supply surplus is putting pressure on oil prices, with the International Energy Agency (IEA) predicting a surplus of approximately 2.3 million barrels per day this year, increasing to 3.8 million barrels per day by 2026 [7] - The initial phase of oil trading in 2026 is expected to be dominated by rising inventories, which will continue to exert pressure on prices in the short term [8] - The market may face challenges in achieving supply-demand balance, with potential for significant price volatility, contingent on meaningful changes in supply, demand, or policy [8]

Core Viewpoint - The oil market is expected to experience a "super glut" in 2026, driven by an influx of new supply amid softening global demand [1][5]. Supply and Demand Dynamics - Trafigura's chief economist highlighted two main factors contributing to the anticipated supply glut: a current supply-demand imbalance and the expectation of increased crude supply next year [2][6]. - Oil prices have been declining throughout the year, with Brent crude at approximately $62 per barrel (down 18% year-to-date) and West Texas Intermediate crude at around $58 per barrel (down 19% year-to-date) [2]. Future Projections - The International Energy Agency forecasts a surge in global oil supply by over 3 million barrels per day in 2026, while demand growth is expected to remain modest [4]. - The firm believes that the supply increase is largely due to long-term projects that are set to come online, which have been in planning for a decade or more [6].

Group 1 - The oil markets have experienced significant volatility due to concerns over a potential supply glut and uncertainties regarding sanctions on Russian producers [1]

Core Insights - The United States is set to break its oil production record this year, but the Energy Information Administration (EIA) warns that an oversupply could lead to lower prices in the near future [1] Production Forecast - The EIA has increased its forecast for U.S. crude production to 13.53 million barrels per day (bpd) for 2025, up from a previous estimate of 13.44 million bpd, surpassing last year's record of 13.23 million bpd [2] - The Gulf of Mexico is expected to average 1.89 million bpd this year, reflecting a 50,000-barrel increase from prior forecasts due to earlier-than-expected project completions [2] Market Dynamics - The EIA anticipates that global oil inventories will rise through 2026, which could exert significant downward pressure on oil prices in the coming months [3] - West Texas Intermediate crude is projected to average about $65 per barrel this year, approximately 15% lower than 2024 levels, while Brent crude is expected to average $68.64 [3] Growth Trends - U.S. crude output is forecasted to reach 13.2 million bpd in 2024, primarily driven by growth in the Permian Basin and the Gulf of Mexico, although growth rates have slowed compared to previous years [4] Supply and Demand Outlook - The EIA expects that only a portion of OPEC+'s planned production increases will be realized due to limited spare capacity among its members [5] - Inventories are projected to rise by an average of 2.1 million bpd in the fourth quarter of 2025, indicating that supply will comfortably exceed demand, potentially leading to further price pressures [5]