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OPEC Expects Market Balance
Oil prices are currently stable as the market awaits the Trump-Putin meeting. OPEC plans to increase output in response to a supply shortfall anticipated next year, according to experts from ING.
In its monthly Oil market report, OPEC maintained its global Oil demand growth forecasts at 1.3 million barrels per day (b/d) for this year and 1.4 million b/d for 2026. It also upheld its supply projections, expecting non-OPEC+ producers to increase output by 810,000 b/d this year and by 630,000 b/d in 2026.
OPEC now expects the global Oil market to balance next year as supply rises to meet demand. In September, OPEC increased supply by 540,000 b/d to a total of 28.4 million b/d, with major contributions from Saudi Arabia, the UAE, Iraq, Iran, and Venezuela.
The International Energy Agency (IEA) is set to release its Oil market report, adding further insights. Meanwhile, interest remains in other market dynamics, as seen in FXStreet’s larger focus on currencies and global economic indicators. Amid these observations, there is continuous engagement in the exploration of potential investment strategies in the Oil sector and beyond.
With today being October 14, 2025, the latest OPEC report signals a significant shift in the oil market outlook for 2026 that we must act on. The expectation is now for a much smaller supply deficit, or even a balanced market, due to rising production from within the OPEC+ alliance. This challenges the prevailing narrative of a prolonged supply squeeze and suggests the upside for oil prices may be limited in the medium term.
Managing Oil Price Strategies
This forecast is not just speculation; it is supported by current actions. In September 2025, OPEC already increased its output by 540,000 barrels per day, with major producers like Saudi Arabia and the UAE ramping up supply. We are seeing this increased supply hit the market right now, which is a tangible factor weighing on prices.
This supply-side news is being met with some caution on the demand front. The latest EIA report showed an unexpected build in US crude inventories of 1.8 million barrels, contrasting with the consistent draws we saw through much of 2024. Furthermore, recent manufacturing PMI data out of China has missed forecasts, raising concerns about the strength of its oil demand heading into the new year.
For our derivative strategies in the coming weeks, this environment calls for caution on aggressive bullish bets. We should consider reducing exposure to long-dated call options for 2026 and instead look at strategies like selling covered calls on existing long positions to generate income. Given the potential for a more balanced market, establishing bear call spreads could also be an effective way to profit from a scenario where prices trade sideways or drift lower.
