The International Energy Agency’s recent report indicates that oil markets should have enough supply by 2025, assuming there are no major disruptions. The forecast for global oil demand growth in 2025 has been lowered to 720,000 barrels per day, down from 740,000.

Global Oil Demand Projections

By the end of the decade, global oil demand is expected to stabilize at around 105.5 million barrels per day. U.S. oil demand in 2030 is now projected to be 1.1 million barrels per day higher than previous estimates. This change is largely due to lower gasoline prices and a slowdown in electric vehicle adoption. World oil supply should increase by 1.8 million barrels per day in 2025, an improvement from the earlier estimate of 1.6 million barrels per day. Furthermore, global oil production capacity is expected to reach 114.7 million barrels per day by 2030. Following the report, WTI struggled to surpass $71 per barrel, even with a daily rise of 1.37%. The oil market is predicted to remain well-supplied through 2030 as long as there are no major interruptions. The International Energy Agency’s report showcases a steady outlook for oil supply in the coming years. While it has slightly reduced short-term demand growth, it still highlights a high level of daily consumption towards 2030. The new forecast for 2025 demand growth is now 720,000 barrels per day, a small decrease from 740,000. While this may seem insignificant, it suggests that demand is stabilizing rather than rapidly increasing. On the supply side, projections are optimistic. Expected production in 2025 has risen to 1.8 million barrels per day, higher than earlier estimates. Capacity is projected to reach 114.7 million barrels per day by the end of the decade, providing a cushion of over 9 million barrels per day above long-term demand expectations. This buffer supports the report’s conclusion that markets will remain well supplied.

US Oil Consumption Trends

U.S. oil consumption is set to increase structurally by 1.1 million barrels per day by 2030. This change is influenced by slower electric vehicle adoption and lower gasoline prices, which keep demand for internal combustion engines steady. This trend affects not just fuel purchases but also refinery operations, diesel production, and the petrochemical industry. In terms of price movements, WTI crude saw a modest increase of 1.37%, approaching the resistant level of $71. However, it faced challenges breaking through this barrier. This illustrates the ongoing market dynamics: strong supply conditions are balanced against slowing demand growth and consistent price ceilings. For traders focused on timing, these updates are important. Current market conditions do not favor aggressive positions in futures. Low volatility and an abundance of supply, alongside muted demand growth, suggest a narrower trading range instead of breakout opportunities. Short-term options may see less premium decay, but traders should have strong conviction if aiming for significant shifts. Instead, relative value trades, like calendar spreads, could be more appealing. Front-month contracts respond quickly to inventory changes, while longer contracts remain stable due to long-term supply expansions. Bearish steepening might come back if immediate barrels remain heavy due to excess storage. The $71 mark on WTI is currently a strong resistance level. It’s crucial to observe how the market reacts to inventory data or market changes around this price. If it consistently hits this resistance, it suggests market stability despite daily fluctuations. However, a sustained movement above this level could shift the market dynamic. Additionally, future trading strategies for the latter half of the year may benefit from carry strategies over volatility-based ones, especially in a market lacking significant price-driving events. Supply growth exceeding demand provides support for conditions that favor storage-linked instruments. Overall, the report leans more towards market balance rather than imbalance. This means traders should carefully consider how they choose their exposure and strike placements. A balanced market typically limits upside volatility unless new catalysts appear—such as geopolitical events or weather disruptions—which are currently not priced in. Create your live VT Markets account and start trading now.

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