08:51 AM EDT, 09/11/2025 (MT Newswires) -- Oil prices weakened early on Thursday after the International Energy Agency (IEA) again warned supply is running ahead of demand as it boosted its production forecast on new supply from OPEC+ and record output from Western Hemisphere producers.

West Texas Intermediate crude oil for October delivery was last seen down US$0.86 to US$62.81 per barrel, while November Brent oil fell US$0.82 to US$66.67.

In its monthly Oil Market Report, the IEA raised its 2025 supply forecast by 0.2-million barrels per day to 105.8-million bpd, with 2026 supply rising by a further 2.1-million bpd to 107.9-million bpd.

"Non-OPEC+ oil supply growth continues apace, with output from the United States, Brazil, Canada, Guyana and Argentina at or near all-time highs. Non-OPEC+ producers are now on track to boost production by 1.4 mb/d in 2025 and by just over 1 mb/d next year. OPEC+ is currently expected to add 1.3 mb/d in 2025 and 1 mb/d next year, on a par with non-OPEC+," the report noted.

The rising supply comes as the agency sees demand-growth remaining muted, expected a rise of 740,000 bpd this year, up marginally from its August forecast, on little growth from emerging economies and falling demand in industrialized nations over the remainder of the year. It expects a similar rise in demand to come in 2026.

The IEA said the outlook for supply rising ahead of demand is likely to push prices lower in coming months, despite concerns over sanctions on Russian production and Middle East turmoil

"Benchmark crude oil prices drifted lower in August, with ICE Brent futures falling by about $2/bbl m-o-m to $67/bbl. Geopolitical concerns intensified amid dwindling hopes for a near-term peace deal between Russia and Ukraine. However, the prospect of looming oversupply dampened any positive price impetus, as investor sentiment towards oil remained strongly bearish," it noted.

Still, prices have been mostly rangebound since April as the summer driving season boosted demand amid the geopolitical tensions. However RBC Capital Markets noted some investors remain bullish on the commodity despite weakening fundamentals.

"At the height of demand season, skepticism surrounding oil's negative outlook was the strongest we've seen since last summer, particularly from the equity investor cohort. On the other hand, physical market sentiment has continued in a staunchly bearish direction," Brian Leisen, the investment bank's global oil strategist, wrote.