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OIL: Spare Capacity to Hold Back Oil Bulls: Platts Forum

OIL
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Crude prices face a bearish outlook for 2025 and 2026, Jim Burkhard, Platts Global Head Crude Oil & Mobility Research said at its forum in London on Monday.

  • Platts base view is that crude oil production growth will exceed demand growth in 2025 and 2026, with production growth to be around double growth in demand.
  • Last year the net change in crude oil supply was negative amid OPEC cuts, and crude inventories which are below the historical range.
  • “This is by no means an oversupplied market,” he said. However, spare capacity from KSA, UAE, Kuwait, and Iraq is over 6m b/d.
  • “Until this spare capacity is whittled down, it will be difficult to see a sustained bull market for oil,” he said.
  • The reemerging big 3 reinforced a likely fall in prices, Burkhard added.
  • He cautioned that US production growth could come to a halt in late 2026, which would be supportive of prices.
  • With Trump asking for more production at a time when the US and Russia are looking for a new relationship, the question is whether OPEC’s decision making be driven by politics or price.
  • Burkhard’s forecast expects a supply increase in OPEC from Q2, but it is not likely to be the full amount, instead more a symbolic move to appease Trump.
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Crude prices face a bearish outlook for 2025 and 2026, Jim Burkhard, Platts Global Head Crude Oil & Mobility Research said at its forum in London on Monday.

  • Platts base view is that crude oil production growth will exceed demand growth in 2025 and 2026, with production growth to be around double growth in demand.
  • Last year the net change in crude oil supply was negative amid OPEC cuts, and crude inventories which are below the historical range.
  • “This is by no means an oversupplied market,” he said. However, spare capacity from KSA, UAE, Kuwait, and Iraq is over 6m b/d.
  • “Until this spare capacity is whittled down, it will be difficult to see a sustained bull market for oil,” he said.
  • The reemerging big 3 reinforced a likely fall in prices, Burkhard added.
  • He cautioned that US production growth could come to a halt in late 2026, which would be supportive of prices.
  • With Trump asking for more production at a time when the US and Russia are looking for a new relationship, the question is whether OPEC’s decision making be driven by politics or price.
  • Burkhard’s forecast expects a supply increase in OPEC from Q2, but it is not likely to be the full amount, instead more a symbolic move to appease Trump.