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IEA warns of potential oil surplus in 2025 as China’s demand slows
The ECB signals possible rate cuts as inflation eases, while the IEA forecasts a 2025 oil surplus amid slowing Chinese demand
IEA forecasts a 2025 oil surplus due to slower Chinese demand
ECB hints at potential rate cuts as inflation cools
The global oil market may face a significant surplus of over one million barrels per day in 2025, largely due to weakening demand from China, according to the International Energy Agency (IEA). The IEA’s latest monthly report, released Thursday, highlights China’s shrinking oil demand, which has fallen for six consecutive months through September and is projected to grow this year at just a tenth of 2023's pace. The surplus could widen further if OPEC+ proceeds with plans to increase production during its upcoming meeting.
IEA’s Head of Oil Industry and Markets, Toril Bosoni, remarked in an interview with Bloomberg TV that China’s oil demand may have peaked. Despite geopolitical tensions in the Middle East, crude prices have fallen by 11% since October as markets focus on increasing output from the Americas, signaling a potentially “well-supplied market in 2025.” Brent crude prices hovered around $72 per barrel on Thursday.
The IEA projects global oil consumption will rise by 920,000 barrels per day this year, less than half the growth rate seen in 2023, bringing the total to an average of 102.8 million barrels per day. Demand is expected to increase by 990,000 barrels per day next year, further highlighting the challenges faced by the global oil market amid shifting demand dynamics.
ECB minutes show consideration of rate cuts
The European Central Bank is signaling potential rate cuts amid easing inflation, according to the minutes of its November meeting. The anticipated slowdown in inflation is largely attributed to declining energy prices. However, ECB policymakers voiced caution, noting persistent inflationary pressures from strong wage growth and weak labor productivity within the eurozone. While inflation forecasts remain optimistic, the ECB underscored the necessity of accumulating more economic data before any policy adjustments. Officials made clear that rate cut decisions hinge on the broader economic outlook and further evidence of declining inflation pressures, emphasizing a cautious, data-centric approach.
