Oil Market Misperceptions: Oil Price Forecasts for 4Q24, 1Q25, and Beyond

From a peak of $95/B a year ago, the WTI oil price is down 32% to $65/B this week. By early August, traders had cut their combined positions in crude and oil products to the lowest levels since 2013. Despite anxiety over China, underlying oil demand-supply fundamentals continue in the opposite direction. The Saudis and OPEC have no credibility on Wall Street.

Traders are focused on the outlook for demand in China and the US. Yet updated forecasts continue to show robust but widely varying demand growth in non-OECD countries while US and OECD oil demand is nearly flat. Almost 80% of the world’s proved oil reserves are in OPEC countries and North American producers are dependent on OPEC supply management for price support. At last year’s prices, OPEC members ran fiscal budget deficits.

US oil exports are growing. Pipeline operator Enbridge CEO said: “Just in the last three or four years, we’ve gone large into oil exports at Enbridge. We own the largest facility now in Corpus Christi called Ingleside, which hits record after record every quarter.” He anticipates production from the Permian basin will grow by 1 to 2 MMBD through the end of the decade to meet export demand.

Wide swings in oil prices frequently recurring heavily impact upcoming quarterly changes in energy sector earnings, investment performance, and inflation. The focus of the Monthly Oil Price Road Map is the forecast for the current quarter, the next quarter, and beyond after comprehensive analysis, regularly updated with the latest data.