What factors will drive oil prices in 2025
The past year was marked by traders ' chronic pessimism about Chinese demand which stabilized prices somewhat, and stabilization may continue in 2025.
It seems that Brent and WTI will end the year at almost the same levels as they started. WTI crude oil started 2024 at a level of just over 70 dollars per barrel, and ended the year at a slightly higher level than that.
It seems that Brent crude oil will record a slightly noticeable loss, starting the year at 77 dollars per barrel and ending the year at a level slightly below the levels of 75 dollars per barrel.
The biggest reason for this somewhat stable oil prices was the focus on China.
Every oil price report this year has included Chinese economic data or oil import figures at the forefront.
This is set to continue in 2025 amid a flurry of reports predicting peak oil demand growth for the world's largest importer.
On the supply side, of course, the focus remains on OPEC, even with expectations of significant growth and excess production from major non-OPEC countries such as the United States, Canada and Brazil, but these expectations are beginning to moderate in relation to the United States, where the industry gives repeated signals that there will be no drilling at will just because there is a pro-oil president in the White House.
OPEC and its OPEC partners have also made it clear since the beginning of the cuts that production will return to normal only when prices rise sufficiently.
This basically means that many of the price falls this year were the result of unrealistic expectations, and have absolutely nothing to do with actual oil fundamentals.
Supply disruptions by OPEC or renewed sanctions on Iran could pose a challenge to price stability in 2025., The growing demand for oil in India and the possibility of an oversupply are other factors that should be taken into account in the forecast of oil prices for 2025.
The fundamentals seem to be largely balanced, price fluctuations in 2024 were mostly dictated by two opposing forces: geopolitical tensions associated with the conflicts in the Middle East and Ukraine, and concerns about slowing demand in China, the world's second largest economy. And throughout the year, speculation about OPEC production cuts also caused some ripples.
Forecasts for 2025
Forecasts for 2025 indicate that oil prices will be in the range of 70-76 dollars per barrel, with a possible oversupply and a slowdown in demand growth.
JPMorgan Bank expects the average price of Brent crude to be 73 dollars per barrel, with a surplus on the market of up to 1.3 million barrels per day.
Goldman Sachs expects oil prices to average 76 dollars per barrel in 2025 based on a moderate surplus of crude and spare capacity among major producers.
The International Energy Agency expects supply to exceed demand in 2025, which could lead to price pressures.
Reports have suggested that the OPEC alliance may postpone production increases until April 2025, in an attempt to support prices in the face of increased production from countries outside the alliance.
However, it should be borne in mind that these forecasts depend on several factors, including geopolitical developments, economic policies, changes in global supply and demand.
Therefore, oil prices may experience fluctuations based on these variables.
