MNI Exclusive: Oil Oversupplied Amid Sagging Demand: Dallas Fed

Oil prices are likely to move down over the year as the market increasingly looks oversupplied in the face of stuttering demand growth and high U.S. output, Dallas Fed senior business economist Garrett Golding told MNI.

• "As it stands right now it's looking still like an oversupplied market this year," Golding said in an interview, largely discounting the medium-term impacts from escalating Middle East tensions and Red Sea attacks so far. "The risks are more or less bi-directional on a fundamental basis: There are risks of supply outages and there are risks from demand because of a slowdown in China and elsewhere."
• "We are seeing supply outstrip demand this year," Golding said.
• "At current levels, if we were to assume that's more or less where we remain, we still get somewhat strong [production] growth out of the U.S.," said Golding. "Between the U.S. and other non-OPEC sources, that is more than enough to accommodate where we would expect global demand growth to head over the next year."
• "We still have growth coming out of other non-OPEC sources and there's really no slowdown to them as well. This is happening at a time of global demand growth that is slowing as well," he said, suggesting likelihood of declining demand out of Europe this year. "Risks are tilted lower on global demand primarily because of what we're seeing out of China so far."
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