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OIL: Brent Fair Value Estimate Lowered to $83/bbl in 2025: Barclays

OIL
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The fair value estimate for Brent in 2025 has been lowered by $2/bbl to $83/bbl with OPEC+ expected to extend production cuts for another quarter next year, according to Barclays cited by Reuters.

  • Global oil demand growth for 2024 has been revised down 140kb/d to 0.9mb/d but growth for 2025 is forecast 210kb/d higher with aggregate oil demand at 104.3mb/d.
  • A deviation of 0.5mb/d to demand estimates would relate to a $10/bbl swing in the Q4 2025 forecast of $80/bbl.
  • The non-OPEC supply growth forecast is unchanged although the US growth is revised lower from 350 kb/d to 250 kb/d y/y in Q4 2025.
  • The recent OPEC decision drives a supply drop from the group of 540 kb/d.
  • There is heightened uncertainty from China or Iran related policies from a new U.S. administration.
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The fair value estimate for Brent in 2025 has been lowered by $2/bbl to $83/bbl with OPEC+ expected to extend production cuts for another quarter next year, according to Barclays cited by Reuters.

  • Global oil demand growth for 2024 has been revised down 140kb/d to 0.9mb/d but growth for 2025 is forecast 210kb/d higher with aggregate oil demand at 104.3mb/d.
  • A deviation of 0.5mb/d to demand estimates would relate to a $10/bbl swing in the Q4 2025 forecast of $80/bbl.
  • The non-OPEC supply growth forecast is unchanged although the US growth is revised lower from 350 kb/d to 250 kb/d y/y in Q4 2025.
  • The recent OPEC decision drives a supply drop from the group of 540 kb/d.
  • There is heightened uncertainty from China or Iran related policies from a new U.S. administration.