USOil Cautious as IEA Reiterates Demand Slowdown Outlook
USOil Analysis
After a notable pullback from its 2024 peak, USOil rebounded last month and comes from a four-week profitable streak – the longest of the year. The extension of the OPEC+ supply curbs and strong summer travelling consumption set the stage for tighter conditions ahead, supporting prices.
However, demand fears resurfaced this week due to weak consumer and factory inflation from China and the International National Energy Agency (IEA) today noted that the country's oil consumption contracted in April and May. IEA largely reaffirmed its outlook that global demand growth will decelerate sharply this year and the next (by around 1 mbpd each year), from more than 2 mbpd in 2023. At the same time, the agency expects supply to expand, as non-OPEC producers keep pumping oil. [1]
The favorable near-term fundamentals support USOil and above the EMA200 (black line) bulls are in control, with the ability to set higher highs towards 87.66. However, they don't inspire confidence for sustained advance.
The longer-term outlook is more downbeat, as OPEC+ will begin returning oil to the market form Q4, while consumption will be constrained due to the clean energy transition, the proliferation of EVs and other factors. The poor weekly start creates risk for moves below the pivotal 80.84-79.84 region, which would shift bias to the downside. Such outcome would expose USOil to 76.13, but deeper losses don't look easy.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 17 Apr 2026 https://www.iea.org/reports/oil-market-report-july-2024 |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.