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, a Reuters monthly poll showed on Tuesday.
The survey of 31 economists and analysts predicted that 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.
“Rising production from non-OPEC countries is expected to keep the market well-supplied. While an economic recovery in China is anticipated, the shift to electric vehicles is likely to limit demand growth,” Sehul Bhatt, director of research at CRISIL, said.
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.
“The decision was driven by the expectation that non-OPEC+ supply growth will outpace demand growth in 2025. This leaves limited room for OPEC+ to raise production… we anticipate a further delay in unwinding of cuts until Q4 2025,” said Florian Grunberger, senior analyst at data and analytics firm Kpler.
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.
“In general, we think U.S. politics matter less than many believe when it comes to the impact on oil prices and the U.S. domestic oil & gas sector,” said Kim Fustier, head of European oil & gas research at HSBC.
However, implementation of intensified sanctions on Iranian oil exports by the Trump administration could offer support to oil prices in the short term, some analysts noted.
(Reporting by Anushree Mukherjee and Brijesh Patel in Bengaluru, additional reporting by Swati Verma)
