The International Energy Agency (IEA) has revised downward the pace of world oil demand growth in 2025. They’ve reduced it to 730,000 b/d, less than their previous estimate of 1.03 million b/d. This change marks a continuation of expectations in a global shift to future oil demand, as many economies are sending conflicting signals. As of Tuesday, West Texas Intermediate (WTI) crude oil prices were holding fairly steady on the week, still down 0.16% near $61 per barrel.
The IEA’s newly-released World Energy Outlook 2023 is full of thrilling surprises. They expect that world oil demand will increase by 690,000 bpd in 2026. The changes reflect a broader market dynamic change, where supply will begin to outweigh demand in the next few years. In particular, global oil supply is expected to outstrip projected demand levels in 2026 by an increase of 950,000 b/d. In March, global oil supply increased by 910,000 b/d to 103.61 million b/d. Part of the reason for this pumping was major contributions across the board from non-OPEC+ nations.
Of that total increase in supply, non-OPEC+ countries represented 890,000 b/d of the increase. In its latest short-term energy outlook, the IEA had forecast that non-OPEC+ supply “will remain robust.” They predict a jump of 1.3 million barrels per day in 2025, bringing total production to 54.4 million barrels per day—driven primarily by U.S. output. By comparison, OPEC’s crude output dropped 150,000 b/d in March to 41.6 million b/d.
Further economic indicators out of Europe and the UK have added to the bearish market sentiment. In the Eurozone, industrial production increased by 1.1% in February. This dramatic growth serves as a bright light of resilience in the ongoing storm on the prospects for the manufacturing sector. The latest figures from the UK revealed that the unemployment rate steadied at 4% for the quarter ending in February. Despite this seeming stability being a positive sign, reticence to spend has seen average earnings disappoint, putting downward pressure on the Pound Sterling.
These changes in macroeconomic performance and the dynamics of oil supply have greatly impacted investor risk appetite. Since the middle of last week, investor confidence has surged, providing a boost to all risk assets, XRP included. Traders are understandably eyeing XRP, which has been trying to establish a solid upward move towards the key psychological level at $3.0000.
In the economic calendar, in the currency markets, the EUR/USD pair fights for upward – bullish – momentum. It is changing hands near 1.1350 on Tuesday’s European morning. Earnings disappointments and changing economic signals cloud both oil and currency market prospects. This powerful combination engenders a lot of ambiguity in both fields.