A surge in U.S. oil exports will boost the tanker market

"Global oil supply is increasing rapidly, and price increases may be on hold
.
"

The judgment made in the latest monthly oil market report of the International Energy Agency (IEA) is a long-awaited consolation
for tanker owners who have been losing money over the past year.

In its latest monthly report, the IEA expects global oil demand to grow by 5.
5 million b/d this year and 3.
4 million b/d next year, in line with
its previous forecast.
However, the IEA raised its forecast for U.
S.
oil production, saying that another 300,000 barrels per day in the fourth quarter of this year and another 200,000 barrels per day next year will be a huge positive
for tanker traffic (tonne-miles) in 2022.

The IEA expects the US to account for 60% of the increase in non-OPEC+ oil supply next year, reaching 1.
9 million b/d
.

The IEA report provoked a strong response
.
Norwegian shipbroker Lorentzen & Stemoco believes that U.
S.
oil production is on track to break the all-time peak
of 13.
1 million b/d within a year.
The oil market is about to shift from a deficit to a surplus, bringing a complete turnaround to the tanker market
.

"U.
S
.
shale producers, both large and independent, will increase production, and OPEC+ producers will respond by competing head-on for market share in Asia.
" Lorentzen & Stemoco wrote
in today's market analysis brief.

Lorentzen & Stemoco predicts that global oil production will increase by 6.
3 million barrels
per day.
With most of the production coming from the US Gulf region into Asia, cargo volumes could grow by double digits, driving an "explosive rebound"
in the tanker market.

However, OPEC's recent forecasts have been less optimistic
.
OPEC expects high energy prices to dampen consumption and slow the pace
of demand recovery.
OPEC believes U.
S.
shale oil production will increase by 610,000 b/d in 2022, 200,000 b/d
more than last month's forecast.

UAE Energy Minister Suhail al-Mazrouei said on Monday that all indications point to an oil glut
in the first quarter of 2022.
He expects OPEC+ to likely maintain existing production schedules
when it next meets in early December.

However, many institutions consider OPEC's view to be relatively "conservative"
.
Both Goldman Sachs and JPMorgan Chase & Co.
predict that oil demand will hit the 100 million b/d mark
by the end of this year or the first quarter of 2022 at the latest.