India: A Key Growth Driver The International Energy Agency (IEA) has shared its medium-term outlook, forecasting that global oil demand will peak by the end of the decade. In the U.S., demand is expected to decline, but not as sharply as last year, with electric vehicles projected to replace 5.4 million barrels per day by 2030. Oil use in power generation, particularly in Saudi Arabia, is likely to drop as gas and renewable energy take the lead. However, demand remains high in the petrochemical industry. Demand trends are shifting; China’s increase will be modest, while the drop in U.S. demand will be less severe due to lower prices and slower growth in electric vehicle adoption. India stands out as the largest growth driver, consuming 5.5 million barrels daily compared to China’s 16.6 million. If market conditions stay stable, the IEA predicts that oil market capacity will grow twice as fast as demand by 2030, mainly due to the U.S. and Saudi Arabia. The IEA points out that capacity growth will be strong at the start of the decade but will slow down as it comes to a close. Investors are urged to conduct thorough market research, considering the risks and emotional stress involved in market investments. Oil Demand Plateau By the end of the decade, projected oil market capacity is set to exceed demand by two-to-one. This could lead to a significant imbalance between production and market needs. The latest IEA findings suggest that strategies based solely on supply and demand may soon be outdated. Instead, companies will need to adapt to long-term trends that might not be immediately clear on price charts. The forecast that demand will plateau around 2030 does not just signal the end of traditional growth; it also has real implications for contract pricing and volume assumptions over various timeframes. For those involved in energy-linked derivatives, it’s crucial to consider how capacity expansion—especially from the U.S. and Saudi Arabia—will shape future market dynamics. The IEA states that U.S. output will remain a significant factor, even with a slowdown in domestic consumption. This indicates that market players should focus not just on domestic consumption trends but also on production growth and export potential. The U.S. seems set to impact global supply chains more than before, making price differences increasingly influenced by international flows rather than just local demand. Create your live VT Markets account and start trading now.

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