Crude oil prices declined for a second consecutive day on Wednesday, pressured by concerns of oversupply after both the International Energy Agency (IEA) and OPEC flagged potential imbalances in the global oil market. The warnings from these key energy organizations have triggered a selloff, as traders anticipate a growing supply glut.
The IEA’s latest report indicated that global oil supply could exceed demand in the coming months, driven by stronger output from non-OPEC producers and a slowdown in global economic activity. At the same time, OPEC’s own outlook pointed to similar risks, suggesting that the market may struggle to absorb the expected increase in production.
Source – FXStreet
The oversupply concerns have overshadowed recent supply cuts by OPEC+ members, which had initially supported prices. However, with demand expected to cool, especially amid ongoing economic uncertainties in major consuming nations like China and the U.S., investors are now recalibrating their expectations for future price movements.
As crude oil continues to lose ground, market participants are focusing on upcoming inventory data and any signals from major producers on potential adjustments to output strategies. While prices could stabilize if demand improves, the immediate outlook remains cautious, with oversupply risks likely to weigh on the market in the near term.
