We lower our average 2024F Brent oil price assumption by 3.6% to USD80/bbl.  YTD to October 3, the average Brent oil price was USD82/bbl, slightly lower than our previous 2024F forecast of USD83/bbl. However, we anticipate subdued oil prices in Q4, driven by weak demand from China, which is expected to outweigh concerns over rising tensions in the Middle East and a projected oil deficit from the US Energy Information Administration (EIA) — defined as a situation where global oil production falls short of global consumption.

We raise our average 2025F Brent oil price projection by 4.0% to USD78/bbl (-2.5% YoY). The median forecast for 2025F growth in global crude oil demand from the International Energy Agency (IEA), the EIA, and OPEC has increased from 1.4 mb/d in April to 1.6 mb/d as of September. Additionally, we believe that the US is under pressure to rebuild its strategic oil inventory in coming years as the current level is ~40% lower compared to its pre-Covid-19 pandemic levels. These factors potentially offset a projected increase in production of 1.3 mb/d from OPEC+ (when it gradually eases current production cuts, starting from December 2024) and a projected increase of 0.4 mb/d in US production (per the EIA). However, we believe the EIA’s forecast for a global oil surplus of 0.4-0.5 mb/d in H2 2025 weigh on the average Brent oil price in 2025, resulting in a slight decline YoY. A consensus of publicly available forecasts, including from Bloomberg and the EIA, calls for an average 2025F Brent oil price of USD81/bbl (vs USD80/bbl in October 2023).

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