JPMorgan expects OPEC+ to maintain production levels, Brent crude to average USD75 in 2025
(MENAFN) In a recent forecast, JP Morgan has projected that the OPEC+ alliance is likely to maintain its current oil production levels for at least another year. This strategy is expected to lead to brent crude averaging USD75 per barrel in 2025. OPEC and its allies, collectively known as OPEC+, decided on Thursday to delay planned increases in oil output for October and November, with the possibility of extending or reversing these adjustments if market conditions demand it.
This decision follows a drop in Brent crude prices to a 14-month low, falling below USD73 a barrel. The decline in prices is attributed to concerns over weaker demand in key markets such as the United States and China, coupled with the potential for increased oil supplies from Libya. JP Morgan has indicated that the likelihood of phasing out production cuts has diminished, and the bank forecasts that prices could fall to USD60 per barrel by the end of 2025. Such a price level would be challenging for both producers and consumers, prompting the need for OPEC+ to consider deeper production cuts of up to one million barrels per day to effectively manage the market.
JP Morgan also noted that the market is now seeking a price point that would prevent OPEC+ from adding unnecessary supply in light of anticipated weaker demand in 2025. Consequently, the bank has revised its oil price forecast for the fourth quarter of 2024, lowering it from USD85 per barrel to USD80, reflecting the recent decline in oil prices.
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