BP anticipates global oil demand to increase by about 1% in both 2025 and 2026. This expectation points to a shift towards a balanced oil market dynamic, where demand growth and non-OPEC supply growth are roughly in equilibrium.<\/p>\n
The increase in non-OPEC production is expected to only slightly offset growth in demand. This development suggests that OPEC+ will regain more control over setting oil prices in the near term.<\/p>\n
With non-OPEC supply growth stabilising, OPEC+ could exert greater influence on market prices. This scenario presents a more supportive environment for oil prices if demand continues to strengthen globally.<\/p>\n
BP’s analysis suggests stability without unexpected demand spikes. Historically, BP has expressed preferences towards a rising oil price, aligning with the CEO\u2019s recent remarks.<\/p>\n
It seems the oil market is rebalancing as supply growth outside of the main producer group is leveling off. This shift puts OPEC+ back in the driver’s seat for setting prices. This backdrop suggests we should be positioned for a more managed market in the coming weeks.<\/p>\n
The forecast for 1% demand growth this year and next feels solid, especially with recent data supporting it. The International Energy Agency’s late July 2025 report confirmed that second-quarter demand was stronger than expected, largely due to a recovery in Asian travel. This firm demand creates a solid floor for prices.<\/p>\n
On the supply side, we’ve seen signs of this plateauing for months. Data from the U.S. Energy Information Administration confirmed a slowdown in Permian Basin output growth for the second straight quarter of 2025. With less new oil coming from outside the cartel, the group’s production decisions become much more impactful.<\/p>\n
Given this view, we see value in strategies that benefit from stable to rising prices. Buying call options on crude futures could capture potential upside if OPEC+ tightens supply further. Selling out-of-the-money put options is another way to express this view, collecting premium on the belief that the group will defend a certain price level.<\/p>\n
We saw a similar playbook run successfully by the producer group not too long ago. Looking back to the 2021-2022 period, their disciplined supply management was the key driver that pushed oil prices significantly higher. The current setup feels very reminiscent of that time.<\/p>\n
We should remember that this outlook, also mentioned back in November 2024, aligns with the interests of major producers who benefit from higher prices. While the overall trend may be supportive, we should expect short-term volatility to spike around OPEC+ meetings, like the one in July 2025 that affirmed current cuts. This presents opportunities for traders who focus on volatility rather than just price direction.<\/p>\n
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