Barclays lowers Brent crude fair value forecast to $83 for 2025
Updates Nov. 22 FACTBOX with Barclays forecasts, updates table with latest forecasts
Dec 16 (Reuters) -Barclays has lowered its fair value estimate for Brent oil to $83 per barrel for 2025 from $85, it said in a research note on Monday.
The investment bank saidoil inventories remain low and the market is in backwardation - a structure reflecting a short-term scarcity premium.
Investors have been cautious, even though the price gap between current and future prices has been narrowing gradually since early September, it added.
"We think the expected supply imbalance next year is abundantly in the price. In fact, we feel fairly confident in our $83/b fair value estimate for Brent next year, which is $10/b ahead of the forwards curve at the time of writing," Barclays said.
It saida 0.5 million bpd shift in demand could swing its Q4 2025 estimate of $80 by $10 per barrel.
Barclays adjusted its market balance outlook, loosening its 2024 estimate by 430,000 bpd but tightening 2025 by 370,000 bpd.
It now expects 2024 global demand growth of 0.9 million bpd, down 140,000 bpd from its previous forecast, with non-OPEC supply forecast up 100,000 bpd.
Barclays expects OPEC+to extend production cuts for another quarter next year, with its current strategy giving it flexibility to "play the waiting game".
Brent crude futures LCOc1 were trading near $74.17 per barrel on Monday, while U.S. West Texas Intermediate crude futures CLc1 were at $71.02 per barrel.
The following is a list of the latest brokerage forecasts for 2024 and 2025 average prices per barrel for Brent and WTI (in $ per barrel):
Brokerage/Agency | Brent | WTI | Forecasts as of | ||
2024 | 2025 | 2024 | 2025 | ||
HSBC | $79.6 | $70 | $75.7 | $67 | Sept. 30 |
UBS | $80 | $75 | $76 | $71 | Sept. 16 |
Macquarie | $80 | $69 | $75 | $65 | Sept. 12 |
BofA | $80 | $65 | $76 | $71 | Dec. 06 |
JP Morgan | $80 | $73 | $76 | $69 | Nov. 22 |
NAB | $81.4 | $78 | - | - | Oct. 06 |
Goldman Sachs | $80 | $76 | $75 | $71 | Nov. 21 |
Citi Research | $79 | $60 | $75 | $56 | Nov. 06 |
DNB | $82 | $77 | - | - | Aug. 20 |
Barclays | $80 | $83 | $76 | $79 | Dec. 16 |
BMI | $81 | $78 | $82 | $79 | Nov. 07 |
Morgan Stanley | $75 | $71 | - | Jan. 3 | |
* indicates end-of-period forecast
# current as of given date, may not indicate date of revision
** JPMorgan 2025 Brent and WTI forecasts were introduced in Nov, 2023.
For a table of crude price forecasts as per Reuters latest monthly poll, see OILPOLL
Reporting by Anmol Choubey and Sherin Varghese in Bengaluru; Editing by Jan Harvey and Jonathan Oatis
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