BoA forecasts crude just above $65 per barrel in 2025
January 10, 2025
Well, the market jumped up as it began today’s trading. As I write this HO is up .1018, Gas up .0596 and crude oil up 3.04.
The market needed some bullish news to give it a shove to the upside and they are now saying more sanctions are coming in the next few days on Russia and Iran. This of course could mean less supply and that pushed prices higher.
The new US sanctions are targeting 180 tankers that have been shipping Russian crude oil.
Russian exports have fallen on higher domestic use and the tighter sanctions from the EU and the UK and that along with the latest western nation potential sanctions has led to concerns that Russia’s exports will be down. Russia is also supposedly adhering to the OPEC+ production quotas, and all this has led to this morning’s jump in prices.
The market is also concerned that the current cold weather hitting Texas may cause refinery problems and that also is supporting prices.
Citi raised its average Brent price forecast for the first quarter from $65 per barrel to $71 per barrel as Chinese buyers have pulled back more than expected on buying Iranian oil. It also raised WTI cure oil price forecast for the first quarter to $67 per barrel. It said it maintains its overall bearish 2025 view, with Brent prices falling to $60 per barrel for the second quarter amid larger than usual seasonals stock builds.
Bank of America analysts forecast Brent crude oil prices will average just $65 per barrel in 2025 because new oil production from non-OPEC countries will continue to grow faster than global oil demand. The bank noted that production gains from Brazil, Canada, Guyana, and Norway will lead the gains in new supply.
BNP Paribas in a research note to clients warned that “… crude prices have risen too much too soon” and Brent, currently above $76 per barrel, will likely “fall back to the low $70s” once seasonal refinery maintenance begins.