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OIL: Brent Outlook Looks Bearish but Risk from Prolonged Libyan Outage: RBC

OIL
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The Brent crude price outlook looks bearish and set to average $72.50/bbl next year amid soft demand, even before considering looming oversupply dynamics in 2025, according to RBC.

  • A slowing economic backdrop and soft Asian demand is combined with smaller draws for global crude inventories of 600kb/d in Q3 compared with 2.1mb/d last year.
  • Lower refinery margins, pockets of demand softness, and the risk of oversupply are likely to keep time spreads under pressure.
  • The expected upcoming U.S. interest rate cuts and the Libyan supply outage may allow OPEC to conclude there is space for the addition oil supply from October.
  • "A prolonged Libyan outage could support Brent prices" around $85/bbl even with additional supply in Q4, Helima Croft said.
  • RBC forecasts Brent at $75.75/bbl and WTI at $71.5/bbl in Q4 2024.
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The Brent crude price outlook looks bearish and set to average $72.50/bbl next year amid soft demand, even before considering looming oversupply dynamics in 2025, according to RBC.

  • A slowing economic backdrop and soft Asian demand is combined with smaller draws for global crude inventories of 600kb/d in Q3 compared with 2.1mb/d last year.
  • Lower refinery margins, pockets of demand softness, and the risk of oversupply are likely to keep time spreads under pressure.
  • The expected upcoming U.S. interest rate cuts and the Libyan supply outage may allow OPEC to conclude there is space for the addition oil supply from October.
  • "A prolonged Libyan outage could support Brent prices" around $85/bbl even with additional supply in Q4, Helima Croft said.
  • RBC forecasts Brent at $75.75/bbl and WTI at $71.5/bbl in Q4 2024.