Market Speaks: IMF highlights bearish fundamentals for oil market, sees average prices in 2025 falling down 13% on year
International Monetary Fund has stated that crude oil prices decreased 5.4 percent between March 2025 and August 2025 as tepid global demand growth and strong supply growth from both OPEC+ and non-OPEC+ contributed to bringing prices down. Barring the temporary price spike in mid-June from the Israel-Iran war, oil prices have been range-bound, trading between $60 and $70 since the US announcement of tariffs in early April. The tariff announcements induced a decrease in global demand expectations and coincided with the start of an accelerated production schedule from OPEC+ (Organization of the Petroleum Exporting Countries plus selected nonmember countries, including Russia).
Bearish fundamentals are now mostly in focus: The International Energy Agency is forecasting 0.7 mb/d (million barrels per day) of global demand growth in 2025 and 1.4 mb/d of non-OPEC+ supply growth, while the latest OPEC+ production schedule gradually brought back 2.5 mb/d through September, one year ahead of schedule, with plans to further increase production. Talks to find a diplomatic solution to the war in Ukraine have stalled, increasing the risk of US secondary sanctions. US futures markets indicate that oil prices will average $68.90 per barrel in 2025, a 12.9 percent decline from the previous year, before decreasing to $65.80 in 2026 and steadily increasing to $67.30 through 2030.
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