HSBC HOLDINGS(US:HSBC)2025-05-25 14:09Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - OPEC+ is expected to announce another significant output hike for July, following the previously announced hikes for May and June, with a pause anticipated in Q1 2026 [7] - Key drivers for OPEC+'s decisions include Kazakhstan's overproduction, seasonal demand increases, and the group's aim to regain market share from non-OPEC producers, particularly US shale [7][8] - The report indicates rising downside risks to Brent price forecasts, now projected at USD 68.5/b for 2025 and USD 65/b for 2026 and beyond [7] Supply and Demand Summary - The updated supply and demand model shows a surplus of 0.2 million barrels per day (mbd) for 2025 and 0.7 mbd for 2026, which is smaller than previously estimated due to a higher demand baseline and a faster decline in Venezuelan output [3][8] - Kazakhstan's crude output is expected to remain flat at 1.80 mbd, with an increase of 150 thousand barrels per day (kbd) in 2025 and 110 kbd in 2026 [11] - Venezuela's production estimate has been cut by 130 kbd on average over 2025-26 due to anticipated earlier and steeper declines in output [11] - The report notes that demand in Gulf countries rises seasonally in summer, with Saudi Arabia's oil consumption increasing by 400 kbd compared to winter [7] Geopolitical Factors - The likelihood of an Iran-US nuclear deal in the near term is low, which reduces the prospects for sanctions relief and higher Iranian supply [7] - Potential disruptions to Venezuelan and Libyan supply are highlighted, with concerns over Chevron's Venezuela oil export license and civil unrest in Libya [7]