Concerns over sluggish demand at a time of rising supply have prompted analysts to sharply lower their oil price forecasts for next year.
Atlantic basin benchmark North Sea Dated will average $78.27/bl in the first quarter of next year, an average of analysts' forecasts shows, $7.20/bl lower than forecasts in July (see table). The projection for 2025 of $76.88/bl is more than $6.30/bl below the previous average. US marker WTI prices will average $73.81/bl in the first quarter, roughly $6.80/bl below the previous survey. WTI is expected to average $72.13/bl next year, $6/bl down on the July average.
BofA Securities revised its Brent price forecast $5/bl lower for 2025. It expects Chinese oil demand to grow by only 180,000 b/d this year and by 210,000 b/d in 2025, down from record growth of 1.45mn b/d last year. "Several factors dramatically reduced China's appetite for oil this year and could soon cause consumption to peak," the bank notes, citing a rapid adoption of electric vehicles and as LNG-fuelled trucks make inroads against diesel. The bank expects the market to tip into a 730,000 b/d surplus in 2025. This is similar to forecasts of a 700,000 b/d surplus for next year by Goldman Sachs and Morgan Stanley.
Higher supply is driven by a ramp-up in output in the Americas, analysts say. Brazil, Guyana, Canada and the US together represent 1.17mn b/d of total growth next year, according to BofA.
Holding position
On Opec+ supply, eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — agreed on 6 September to start unwinding 2.2mn b/d of voluntary output cuts from December, instead of October, over 12 months. Goldman Sachs says "additional delays are plausible" but expects that Opec+ "will go ahead with gradual production increases at some point in the next few quarters because disciplining non-Opec+ supply and supporting internal cohesion and global oil demand is likely the optimal long-run strategy". But BofA says "the market has limited appetite for additional volumes" and suggests that "some of the recent price weakness may be the market attempting to force Opec+ to hold off on any output increases". Ice front-month Brent fell below $70/bl for the first time since December 2021 on 10 September.
Concerns about demand look to be offsetting disruption to Libyan supplies and elevated tensions in the Middle East. Over 850,000 b/d of largely light sweet production from Libya is off line. But BofA says the dispute in Libya is "reportedly nearing a resolution that we think will lead to the restoration of output by the end of the quarter". Talks took place on 3 September and 11 September but an end to the impasse in the country has yet to be reached.
| Crude price forecasts | $/bl | |||||||||||
| Brent | WTI | |||||||||||
| 1Q25 | ±* | 2Q25 | ±* | 2025 | ±* | 1Q25 | ±* | 2Q25 | ±* | 2025 | ±* | |
| ABN Amro | 75.00 | -15.00 | 75.00 | na | 75.00 | -13.00 | 70.00 | -15.00 | 70.00 | na | 70.00 | -13.00 |
| BofA Securities | 74.00 | -12.00 | 76.00 | na | 75.00 | -5.00 | 70.00 | -9.00 | 72.00 | na | 71.00 | -4.00 |
| Goldman Sachs | 77.00 | -6.00 | 76.00 | na | 77.00 | -5.00 | 73.00 | -5.00 | 72.00 | na | 71.00 | -5.00 |
| Morgan Stanley | 75.00 | na | 75.00 | na | 75.00 | na | 70.00 | na | 70.00 | na | 70.00 | na |
| UBS | 87.00 | 0.00 | 87.00 | na | na | na | 82.00 | 0.00 | 82.00 | na | na | na |
| Argus Consulting† | 81.61 | -1.72 | 83.00 | na | 82.39 | -0.35 | 77.84 | -2.60 | 79.24 | na | 78.63 | 0.13 |
| Average | 78.27 | -7.20 | 78.67 | na | 76.88 | -6.31 | 73.81 | -6.81 | 74.21 | na | 72.13 | -6.00 |
| *change from previous survey in Jul 2024 †Argus Consulting is a division of Argus Media | ||||||||||||
