Crude Oil Prices Under Pressure from Persistent Oversupply
Global crude oil prices are under pressure due to an ongoing supply glut that has persisted despite earlier expectations of a return to balance. The oversupply is attributed to record production in the Americas, resilient output from OPEC+ members, and softer-than-expected global demand growth, particularly from China.
The combination of these factors has kept a lid on oil price rallies, with Brent crude trading near $80 per barrel and West Texas Intermediate (WTI) hovering around $75. Storage levels at Cushing, Oklahoma, have been hovering near seasonal averages, but floating storage globally has increased by 15% since April.
On the demand side, the International Energy Agency (IEA) trimmed its 2025 growth forecast by 100,000 barrels per day in its latest monthly report. U.S. gasoline demand has shown resilience, with a 2% year-over-year increase during the Memorial Day holiday week.