Cornerstone Morning HighlightsAugust 14, 2025

Prices

Sep WTI: $62.65 (-$0.51)

Oct Brent: $65.60 (-$0.43)

Market Overview

Oil futures are weaker this morning as the International Energy Agency (IEA) warns of a record supply glut into late 2025 and 2026. Demand growth is slowing sharply while supply continues to climb. WTI and Brent are both trading lower after the IEA projected inventories could rise at the fastest pace on record next year, surpassing pandemic-era builds.

OPEC+ / Russia

Russia Compensation Cuts: Moscow will extend its compensation for prior overproduction by three extra months, cutting 85,000 b/d each month from July–November and 9,000 b/d in December.

Compliance Deadline: OPEC+ members not in full conformity must submit updated plans to the Secretariat by August 18, per the Joint Ministerial Monitoring Committee.

OPEC Output: July crude production fell 210k b/d to 28.21M b/d, with Saudi declines partly offset by gains from the UAE and Iraq.

IEA Oil Market Report – Key Points

Record Surplus Ahead: 2026 surplus projected at 2.96M b/d, driven by strong supply growth and weak demand in China, India, and Brazil.

Demand Outlook:

2025 demand: 103.7M b/d, up just 680k b/d (weakest since 2019).

2026 demand: 104.4M b/d, up ~700k b/d.

Jet fuel/kerosene demand to remain below 2019 levels this year and next.

Supply Outlook:

2025 supply growth: +2.5M b/d to 105.5M.

2026 supply growth: +1.9M b/d to 107.4M.

Call on OPEC crude in 2026 revised down to 25.7M b/d.

Inventories: Observed stocks reached 7.8B bbl in June, a 46-month high, led by oil on water and non-OECD crude/products.

Refining: Global crude throughput to hit a record in August.

Corporate & Regional News

Exxon Mobil: Signed a deal to explore offshore Trinidad & Tobago, building on its Guyana success.

South Korea: Refiner buys 1M bbl of Johan Sverdrup crude for Nov. arrival—rare North Sea purchase.

India’s ONGC: Quarterly profit down on lower prices and stagnant production.

Brazil’s Petrobras: Cleared to test emergency accident plan at key offshore block amid licensing battle.

Vitol Outlook: Notes shift away from growth dominated by sweet grades, signaling possible crude quality changes ahead.

Weather Risk

Tropical Storm Erin: Formed northwest of Cabo Verde Islands; expected to strengthen into a Category 3 hurricane by Aug. 16. Could become an early-season Atlantic major hurricane, joining only seven other seasons since 1990 with one before mid-August.

Key Takeaways

IEA sees demand stagnation and record-high inventories as the dominant macro headwinds for oil.

OPEC+ supply discipline remains critical—Russia’s phased cuts highlight ongoing compliance challenges.

Weather risks emerging with Tropical Storm Erin, which could shift Atlantic shipping and Gulf of Mexico production if track changes.