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Economic Viewpoint

Oil Market: Should We Expect a Glut and Falling Prices in 2025?

October 28, 2024
Marc-Antoine Dumont
Senior Economist

Unless a major crisis in the Middle East disrupts production, a global oil glut is expected in 2025 with supply set to increase despite moderating demand growth. Gasoline consumption is also in the midst of a transformation, with the effects of increased fuel efficiency in combustion engines and the penetration of electric vehicles being felt faster than anticipated. As a result, the price of West Texas Intermediate (WTI) has fallen from US$85 per barrel in July to US$70 per barrel at the time of writing. But expectations for next year’s oil glut may be overblown. China could continue with destocking and producers, mainly in the West, could end up slashing production in the face of low prices. For these reasons, we expect WTI to approach US$75 per barrel in the next few quarters.

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