Crude Oil: International institutions further strengthen expectations of oversupply

■ International organizations continue to reinforce the view that "global crude oil supply and demand will tend to be oversupplied."  

■ The relationship between crude oil supply and demand is likely to weaken, making it difficult for WTI prices to gain upward momentum. It is important to keep monitoring factors that influence supply and demand. 
 
    International organizations released their latest forecasts for global crude oil supply and demand as of July. Regarding the growth of global daily crude oil demand in 2025, the U.S. Energy Information Administration (EIA) projects an increase of 800,000 barrels (from 102.74 million barrels in 2024 to 103.54 million barrels in 2025), while the Organization of Petroleum Exporting Countries (OPEC) expects an increase of 1.29 million barrels (from 103.84 million barrels to 105.13 million barrels). Both forecasts remain unchanged from last month. The International Energy Agency (IEA) slightly lowered its growth estimate from 800,000 barrels last month to 700,000 barrels (from 103 million barrels to 103.7 million barrels). This downward revision reflects concerns about weak demand growth, driven by fears of a weakening global economy, especially in emerging countries, due to President Trump's tariff policies. 
 
    Regarding global crude oil supply in 2025, the EIA significantly increased its forecast to 1.81 million barrels (from 102.8 million barrels to 104.61 million barrels), up from last month's estimate of 1.38 million barrels. Similarly, the IEA raised its forecast to 2.1 million barrels (from 103 million barrels to 105.1 million barrels), compared to last month's 1.8 million barrels. On July 5, some OPEC+ members decided to boost their production by 548,000 barrels per day in August, expanding on the ongoing increase since May (originally 411,000 barrels per day). This move aims to maintain pricing power amidst potential supply reductions caused by the Iran-Israel military conflict. Consequently, both the EIA and IEA further affirm that "global crude oil supply will be in excess in 2025." 
 
    In this environment of loose supply and demand, WTI crude oil futures prices find it hard to gain upward momentum. Since July, the Middle East situation has remained relatively stable, and oil prices have fluctuated around $65 to $70, without clear direction. Although the summer holidays tend to boost gasoline demand, the impact on crude oil demand remains uncertain due to the approaching trade negotiation deadline between the U.S. and its main trading partners (August 1). On the supply side, OPEC+'s production trend remains a key focus. Meanwhile, the U.S. announced sanctions against Russia if no ceasefire is reached in Ukraine, but a 50-day grace period is in effect before these sanctions take full effect. Given the market's general view that both supply and demand are easing, it is crucial to closely monitor these potential developments.