Supply is back in the driver’s seat for global oil markets.
At issue is rising crude production from non-OPEC+ nations including the US, which could outstrip global demand that’s still growing but at a slower pace. The oil cartel’s response has been to pledge deeper output cuts, but traders are skeptical they’ll be sufficiently implemented to fully eliminate a surplus.
The combination has already pushed crude to its first annual decline since 2020 — both Brent and West Texas Intermediate fell over 10% last year — upending expectations of higher prices stemming from a post-pandemic recovery. Complicating the picture further, speculators have tightened their grip on the market, fueling price swings that are sometimes divorced from fundamentals.
