October 2nd - Over the past several months, most forecasting institutions have continuously warned that the global crude oil market will experience oversupply, accompanied by economic weakness and accelerated energy substitution, potentially causing oil prices to decline significantly. However, reality has run counter to these predictions, with benchmark oil prices remaining in a relatively resilient range. NCE Australia believes this divergence is not coincidental, but rather the inevitable result of multiple intertwined factors in the global energy market.
First, forecasting models often underestimate the impact of geopolitical policies on oil markets. Several major economies continue to strengthen energy sanctions, weakening the export capacity of specific oil-producing countries, thereby directly affecting the global supply-demand balance. Meanwhile, market demand has not experienced the anticipated cliff-like decline. NCE Australia states that since spring this year, major Asian importing countries have continuously increased crude oil purchases. Even though some quantities flow into strategic reserves rather than refining processes, this has objectively provided price support.
From a data perspective, research from the Oxford Institute for Energy Studies shows that current global floating oil storage and OECD inventories are both below five-year average levels, reflecting continued consumption resilience. Additionally, declining fuel export volumes from some Asian countries indirectly confirm the stability of domestic demand. These facts present a clear gap with the prevalent narrative of "peak demand." NCE Australia believes that ignoring these real-world data points and relying solely on electric vehicle sales forecasts and economic growth slowdown to judge oil price trends is clearly too one-sided.
On the supply side, OPEC+ production constraints remain effective, while US shale oil producers are gradually slowing their production increases due to concerns about limited profit margins. These supply restrictions limit oil prices' downward potential. In other words, even though certain price pressures exist in the market, the possibility of oil prices breaking below excessively low ranges remains unlikely.
Looking ahead, NCE Australia believes that geopolitical variables and demand resilience will continue to be core forces supporting oil prices. Although voices about "oversupply" still exist in the market, the absence of sudden shocks makes it difficult for a true oil price bear market to form. Rather than being obsessed with single-model predictions, it would be better to focus more on real-world inventory, import, and consumption data, which are the key to explaining oil market trends.