Oil Holds Near $70 as Market Braces for Future Surplus

Despite firm oil prices near $70, the market is grappling with forecasts of a significant supply surplus in late 2025 and 2026 as OPEC+ unwinds output curbs and non-OPEC production ramps up. Both the IEA and US Energy Information Administration have raised their supply estimates, projecting a surplus exceeding 2 million barrels per day.

Current tight supply conditions and strong demand, particularly in jet fuel and U.S. consumption, sustain prices for now. However, analysts warn that the seasonal summer strength will fade, and growing inventory builds could pressure prices downward, impacting inflation and high-cost producers.