Rising oil supply could lead to tough time for traders, all eyes on OPEC and allies for support
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.
