Brent crude outlook bearish on oversupply, grim oil demand; 2025 average pegged at $74 after hitting $80 in 2024 | Stock Market News

Oil prices are likely to be constrained near $70 a barrel in 2025 as weak demand from China and rising global supplies are expected to cast a shadow on OPEC+-led efforts to shore up the market. Brent crude would average $74.33 per barrel in 2025, down from a forecast of $74.53 in November, marking an eighth straight downward revision.

The global benchmark Brent crude has averaged around $80 a barrel so far this year and was poised for a 3% yearly decline on weakening demand stemming from top importer China.

U.S. crude is projected to average $70.86 per barrel in 2025, compared with last month’s expectation of $70.69. Most of the poll respondents expect the oil market to be in a surplus next year, with analysts from JPMorgan predicting that supply will outpace demand to the tune of 1.2 million barrels per day (bpd).

OPEC+, which pumps about half the world’s oil, at its December meeting pushed back the start of oil output rises by three months until April 2025 and extended the full unwinding of cuts by a year until the end of 2026.

Global oil demand was seen growing between 0.4 million and 1.3 million bpd in 2025, the poll showed. That compares with OPEC’s 2025 growth estimate of 1.45 million bpd.

Markets are also bracing for substantial policy shifts, encompassing tariffs, deregulation, and tax amendments as Donald Trump is set to return to the White House in January 2025.

As we look ahead to 2025, an interesting interplay between the global economy, industry dynamics, and corporate strategies will likely play out. Although the oil and gas industry is no stranger to disruption—and recent history suggests it has emerged stronger from such challenges—the coming year could be pivotal due to easing monetary policies, geopolitical tensions, and postelection energy policies. With oil prices projected to remain range-bound amid a cautiously optimistic investment environment, oil and gas companies are expected to focus on strategic capital allocation, technological innovation, and maintaining capital discipline.

State of the global economy: The confluence of easing monetary policies amid global slowdown fears, rising geopolitical tensions impacting financial markets and energy trade flows, and the shaping of energy policies following the 2024 elections in more than 70 nations could make 2025 a pivotal year for the global economy and energy markets. Analysts project oil prices to hover between US$70/bbl and US$80/bbl in 2025, with a potential uplift of US$10/bbl if geopolitical tensions escalate

Leading global investment bankers Morgan Stanley and HSBC revised down their expectations for an oil market surplus next year and forecast a Brent crude price of $70 per barrel, following a decision by the Organisation of Petroleum Exporting Countries (OPEC) to delay and slow plans for a higher crude output. The decision comes after crude prices have weakened 18 per cent since June over an oversupply in the market and low war-related risk premium.