Oil prices edged higher in early Asian trading on Thursday, extending gains as persistent supply concerns offset forecasts of an impending surplus next year. The market found support after the International Energy Agency (IEA) raised its outlook earlier this week for a record 4 million barrels per day surplus in 2026, driven by expectations that the OPEC+ alliance will continue to increase production.

However, analysts at ANZ Research noted that actual OPEC+ output has fallen short of its quota ceiling this month. Some members have implemented compensatory cuts to offset overproduction earlier in the year, while others are struggling to raise output due to years of underinvestment, which has weakened their production capacity. These supply constraints are helping to stabilize prices in the near term.

Traders are also closely monitoring geopolitical risks, refining margins, and shifts in demand as colder months approach. Despite the IEA’s surplus forecast, the market remains cautious that production shortfalls and logistical challenges could tighten supply faster than expected.

As of the latest trade, front-month West Texas Intermediate (WTI) crude futures were up 0.94% at $58.82 per barrel, while Brent crude, the global benchmark, rose 0.92% to $62.48 per barrel. Analysts suggest that while the longer-term outlook may lean toward softer prices if OPEC+ fully restores production, short-term price strength is likely to persist amid ongoing supply-side uncertainty.