Oil Markets Weekly_The biggest pushback

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the global oil market, focusing on supply and demand dynamics, price forecasts, and geopolitical influences affecting oil production and pricing. Core Insights and Arguments 1. Oil Demand and Supply Forecasts: - Total oil demand is projected to average 104.4 million barrels per day (mbd) in 2025, with a slight increase from 104.1 mbd in 2024 [10][91]. - Total oil supply is expected to reach 105.7 mbd in 2025, indicating a surplus of 1.2 mbd in the market [10][91]. 2. Brent and WTI Price Projections: - Brent crude oil is forecasted to average $80 per barrel** in 2024, with expectations of a decline to **$73 in 2025 and further to $61** in 2026 [40][69]. - WTI prices are projected to follow a similar trend, with an exit price of **$64 by the end of 2025 [69]. 3. Geopolitical Factors: - The incoming Trump administration's policies are expected to focus on maintaining low energy prices, potentially impacting oil supply from Iran, Venezuela, and Russia [100][101]. - There is a consensus that the administration may prioritize domestic oil production increases over international supply constraints [100][101]. 4. US Oil Production Growth: - US total oil liquids production is projected to increase by 750 kbd in 2024, surpassing 20 mbd [71]. - A further increase of 670 kbd is expected in 2025, primarily driven by the Permian Basin and Gulf of Mexico projects [71][78]. 5. Brazilian Oil Production: - Brazilian crude and condensate production is anticipated to rebound in 2025, with new FPSO units expected to add 590 kbd of capacity [78]. - The market has expressed skepticism regarding the projected growth, with consensus estimates being more conservative [78]. 6. OPEC's Role: - OPEC's production levels are expected to remain stable, with no significant unwinding of cuts anticipated as long as market balances indicate potential weakness [84][86]. - Recent OPEC meetings have shifted expectations towards tighter global oil balances, reducing the likelihood of a price collapse [84]. Other Important Insights - Market Sentiment: There is a notable divergence in opinions regarding oil price forecasts among analysts, with some projecting prices as low as $60** and others as high as **$95 for 2025 [41]. - Inventory Trends: OECD oil inventories have seen a decline of approximately 17 million barrels year-to-date, indicating a tighter market despite the projected supply surplus [70]. - Natural Gas Liquids (NGLs): NGL production is expected to contribute an additional 310 kbd to overall liquids growth in 2025, highlighting its importance in the US oil landscape [55]. This summary encapsulates the critical points discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the global oil market.