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OIL: OIES Reduce 2024 Brent Forecast on Contained Iran-Israel Tensions

OIL

OIES have reduced the Brent forecast for 2024 by $0.9/bbl to $84.5/bbl and 2025 by $2/bbl to $79/bbl in 2025, according to the latest Oil Monthly report.

  • The Q2 price was revised down by $2.4/bbl to $87.6/bbl, primarily driven by the containment of Iran-Israel tensions.
  • Brent at $86.2/bbl is Q3 is supported by tightening balances before falling to the low-$80s in Q4, assuming OPEC+ gradually unwinds voluntary cuts in Q3.
  • A potential extension of the OPEC+ voluntary cuts beyond June could sustain Brent in the $85-90/bbl range in H2.
  • The oil market deficit in 2024 has been lowered by 220kb/d to 340kb/d reflecting slow progress on full OPEC+ compliance and upward forecast revisions in NGLs.
  • A 380kb/d surplus is expected in 2025 on higher non-OPEC and other liquids supply exceeding small global demand gains.
  • The global demand growth forecast is unchanged at 1.6mb/d in 2024 and 1.3mb/d in 2025. Gasoline and jet fuel demand remains supportive, but diesel/gasoil demand is persisting.
  • Global supply growth forecast is raised by 100kb/d to 1.1mb/d in 2024 and by 50kb/d to 2mb/d in 2025 led by the US, Canada and Brazil.

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