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OIL: Crude Surplus

OIL
BulletEnergy BulletsCommodities

Rising OPEC and non-OPEC supply is expected to outpace demand growth leading to an oil market surplus of 700kb/d in 2025, according to Morgan Stanley cited by Bloomberg.

  • Brent is forecast at $72/bbl in Q1 and $70/bbl for the remainder of 2025. Brent is likely anchored around $70/bbl, but no lower, as the probability of further OPEC cuts rises considerably below that level.
  • Potential tariffs could lead to lower prices than forecast.
  • OPEC supply growth is expected at 300kb/d and non-OPEC at 1.4mb/d compared to demand growth of 1mb/d in 2025.
  • The surplus would likely result in inventory builds, a reduction in forward curve backwardation and downward price pressure.
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Rising OPEC and non-OPEC supply is expected to outpace demand growth leading to an oil market surplus of 700kb/d in 2025, according to Morgan Stanley cited by Bloomberg.

  • Brent is forecast at $72/bbl in Q1 and $70/bbl for the remainder of 2025. Brent is likely anchored around $70/bbl, but no lower, as the probability of further OPEC cuts rises considerably below that level.
  • Potential tariffs could lead to lower prices than forecast.
  • OPEC supply growth is expected at 300kb/d and non-OPEC at 1.4mb/d compared to demand growth of 1mb/d in 2025.
  • The surplus would likely result in inventory builds, a reduction in forward curve backwardation and downward price pressure.