Sept 6 (Reuters) - Bank of America Global Research on Friday downgraded its 2025 Brent price forecast by $5 to $75 per barrel, citing weaker demand, particularly from China, and significant inventory builds.
According to the bank's analysts, subdued global oil demand growth of 1.1 million barrels per day (bpd) year-on-year in 2025, combined with a non-OPEC oil supply increase of nearly 1.6 million bpd, will limit OPEC+'s ability to raise output.
Several factors have dramatically reduced China's oil appetite this year, potentially leading to peak consumption, with demand growth expected to slow to 180,000 bpd and 210,000 bpd year-on-year in 2024 and 2025, respectively.
"The mismatch of global demand and non-OPEC supply growth rates creates a conundrum for OPEC+, which had hoped to regain market share in 4Q 2024-2025," the bank said.
OPEC+ on Thursday agreed to delay a planned oil output increase for October and November after crude prices hit their lowest in nine months, adding that it could further pause or reverse the hikes if needed.
Even with OPEC+ plans on hold, the market should tip in to a 730,000 bpd surplus in 2025, pressuring prices lower, BofA noted.
The group has two potential strategies - either to allow high prices to prevail as non-OPEC supply caters to global oil demand, or boost production, risking a dip in prices and revenue, with the objective of driving higher-cost producers out of the market.
"The first case is our baseline. The latter case, a market-share war, could see Brent oil prices fall to an average of $60/bbl next year, in our view," the bank added.
Citi also warned earlier this week that failure to cut production could result in $60 per barrel oil prices in 2025, driven by increased non-OPEC supply and lower demand.
The following is a list of the latest brokerage forecasts for 2024 and 2025 average prices per barrel for Brent and WTI (in $ per barrel):
Brokerage/Agency
** JPMorgan 2025 Brent and WTI forecasts were introduced in Nov, 2023.
For a table of crude price forecasts as per Reuters latest monthly poll, see
Reporting by Anushree Mukherjee and Swati Verma in Bengaluru Editing by Matthew Lewis
