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The International Energy Agency’s recent report states that by 2025, oil markets are expected to be well supplied, assuming no major disruptions. The report reduces the forecast for 2025 world oil demand growth to 720,000 barrels per day, down from 740,000 barrels per day.
Global Oil Demand Projections
Global oil demand by the end of the decade is anticipated to stabilise around 105.5 million barrels per day. Meanwhile, U.S. oil demand in 2030 is projected to be 1.1 million barrels per day higher than earlier forecasts, influenced by lower gasoline prices and reduced electric vehicle adoption.
World oil supply is expected to increase by 1.8 million barrels per day in 2025, compared to an earlier estimate of a 1.6 million barrels per day rise. Additionally, global oil production capacity is forecast to reach 114.7 million barrels per day by 2030.
Following the report, WTI faced resistance above $71 per barrel, although it showed a daily increase of 1.37%, trading near this level. The oil market is expected to remain comfortably supplied through 2030, provided there are no major interruptions.
The report from the International Energy Agency outlines a steady picture for oil supply over the next few years. It revises demand growth downward in the near term, but still points to a high base in daily consumption through 2030. Expectations have shifted subtly, with demand growth in 2025 now forecast to rise by 720,000 barrels per day, down slightly from the earlier 740,000. This may not appear dramatic on its own, but it suggests a maturing demand environment — one where expansion is tapering rather than accelerating.
On the supply side, projections tilt to the upside. Forecasts now point to a production increase of 1.8 million barrels per day in 2025, more than what had been expected earlier. Capacity is projected to hit 114.7 million barrels per day by the end of the decade. That marks a buffer of over 9 million barrels per day above long-run demand expectations — a sizeable cushion that adds weight to the report’s suggestion that markets are likely to stay well supplied.
US Oil Consumption Trends
We take note of the structural increase in U.S. oil consumption through 2030, revised higher by 1.1 million barrels per day. The assumptions here hinge on more tepid electric vehicle uptake and cheaper petrol – factors that lengthen the tail on internal combustion engine demand. This isn’t just about fuel at the pump — it also feeds into refinery runs, diesel production, and petrochemicals.
Looking at the price action, we saw WTI crude climb modestly, up 1.37% on the day, nearing a ceiling around $71. But it hit some resistance there, failing to break through with any conviction. This reflects the tug-of-war in the market narrative: on one side, reassuring supply dynamics; on the other, a slowdown in demand momentum and stubborn price ceilings that continue to cap rallies.
For timing-oriented traders, particularly those in derivatives, these developments matter. What we’re seeing doesn’t scream for aggressive directional positioning, at least not in outright futures. Volatility remains low, and the abundance of supply combined with muted demand revisions points to a narrower trading band, rather than breakout potential. Short-dated options may see reduced premium bleed, but buyers would need strong conviction if positioning for a sharp shift.
Instead, relative value trades within the curve may warrant more attention — calendar spreads, for instance, especially as front-month contracts react more quickly to inventory draws, while back months hold steady given long-term supply builds. Bearish steepeners could reassert if prompt barrels stay heavy due to surplus storage.
The technical level near $71 on WTI appears to be firm for now. Flows around that price, particularly how the market responds to inventory data or macro shifts, should be watched closely. If we see repeated rejection here, it reinforces the idea of a well-anchored market, despite daily swings. But a sustained move above, with volume, could change the tempo.
There’s also a longer consideration related to positioning into the latter half of the year. Carry strategies may perform better than volatility-based ones, particularly in a market showing few catalysts for persistent price trends. Supply growth outpacing demand offers structural support for contango conditions — something that favours rolls and storage-linked instruments.
Ultimately, the report tilts more toward balance than imbalance. That’s something we can act on when selecting exposure types and strike placements. But balance also implies limited upside volatility unless a new catalyst emerges — geopolitical risks, weather disruptions, or sudden shifts in demand. None of these are priced in for now – which, in turn, is a pricing point worth noting.
