It could be that oil markets haven’t but made up their thoughts whether or not the brand new U.S. administration is inherently bullish or bearish for oil costs.
That’s what analysts at Commonplace Chartered Financial institution, together with the corporate’s Commodities Analysis Head Paul Horsnell, mentioned in a report despatched to Rigzone late Tuesday by Horsnell, including that current value motion has been extraordinarily cautious.
“Brent stands nearly on the origin in our abstract of week on week modifications, with two successive weeks of solely restricted value modifications,” the analysts acknowledged within the report.
- Advertisement -
“April Brent settled at $75.87 per barrel on 10 February, every week on week fall of $0.09 per barrel; within the earlier week the April contract additionally trod water, falling by simply $0.22 per barrel,” they added.
The analysts famous within the report that volatility has additionally moved sideways.
“The 30-day realized annualized Brent measure has spent the previous three weeks inside in a slender 21.2-22.8 % vary,” they mentioned within the report.
“Nonetheless, beneath these indicators of tranquility we expect there’s a bullish market attempting to get out,” they added.
Within the report, the Commonplace Chartered Financial institution analysts mentioned they assume the oil market will transfer greater for 3 predominant causes.
“First, we expect the market narrative of an impending imminent provide glut that dominated sentiment within the latter half of final yr is exhibiting indicators of weakening,” they mentioned.
“The glut narrative continues to be very simple to seek out in analyst and media stories; nevertheless, it seems to us that the surpluses being predicted are each getting smaller and shifting additional again in time,” they added.
“Our personal mannequin continues to point out no surplus this yr, even when OPEC+ will increase output in accordance with the present schedule,” they continued.
“Second, we expect final yr’s regular erosion of demand progress expectations is now reversing; we expect Q1-2025 demand has thus far been greater than consensus, aided by robust progress in Asia ex-China, and by the mixture of chilly northern hemisphere climate and gas switching in direction of oil and away from gasoline,” they went on to notice.
The analysts acknowledged within the report that the third motive they count on costs to interrupt to the upside is lowered provide expectations, “and specifically a widespread market re-evaluation of the outlook for U.S. provide progress in mild of 2024’s sharp slowdown”.
In its report, Commonplace Chartered Financial institution projected that the ICE Brent close by future crude oil value will common $82 per barrel within the first quarter of 2025, $84 per barrel within the second quarter, $89 per barrel within the third quarter, and $93 per barrel within the fourth quarter.
The corporate forecast that the ICE Brent close by future crude oil value will common $93 per barrel total in 2026, the report confirmed.
In its newest brief time period power outlook, which was launched on Tuesday, the U.S. Vitality Data Administration (EIA) forecast that the Brent spot value will common $74.50 per barrel this yr and $66.46 per barrel subsequent yr.
A analysis observe despatched to Rigzone by the JPM Commodities Analysis group on Friday confirmed that J.P. Morgan expects the Brent crude value to common $73 per barrel in 2025 and $61 per barrel in 2026.
In a BMI report despatched to Rigzone by the Fitch Group on February 5, BMI projected that the Brent value will common $76 per barrel in 2025 and $75 per barrel in 2026.
Rigzone has contacted the Trump transition group, the White Home, and the U.S. Division of Vitality for touch upon the Commonplace Chartered report. On the time of writing, not one of the above have responded to Rigzone’s request.
To contact the writer, e-mail andreas.exarheas@rigzone.com
