From Investing.com: 2024-12-11 07:55:00

The global oil market is projected to be in surplus in 2025, leading to lower prices due to OPEC+ extending supply cuts. Non-OPEC supply is expected to grow by 1.4m b/d, exceeding demand growth estimates of under 1m b/d. ICE is anticipated to average US$71/bbl in 2025. Risks include stricter sanctions and Middle East instability.

OPEC+ has defied expectations by delaying the return of 2.2m b/d of supply, extending cuts until April and planning a slower supply increase to balance the market. The group may need to accept lower prices to prevent market share loss. Compliance, disagreements, and price wars pose challenges for the group in 2025.

OPEC’s large spare capacity of over 5m b/d provides market comfort, with the potential to offset disruptions. However, the capacity is mainly in the Persian Gulf, relying on the Strait of Hormuz for supply. OPEC’s production decisions are influenced by fiscal breakeven prices, aiming for optimal revenue without demand destruction.

Iran’s oil supply may face risks under a Trump presidency, with potential sanctions threatening around 1m b/d of supply. US oil production is expected to grow modestly in 2025, with Trump’s policies offering potential upsides like reduced regulations and faster approvals. Trade tensions could impact oil demand and prices, especially if retaliatory tariffs are imposed.

Global oil demand is expected to grow modestly in 2025, driven by Asia, as China’s demand growth slows due to economic factors and increased new energy vehicle sales. Refinery margins have weakened globally, signaling lower demand for refined products. Structural and cyclical trends may impact global oil demand growth next year.



Read more at Investing.com: Crude Oil: Market Set to Be in Surplus Despite OPEC+ Action