HSBC cuts oil price forecasts for 2024 and 2025
Updates Sept. 16 FACTBOX with HSBC forecasts, quotes and context
Oct 1 (Reuters) -HSBC has lowered its annual oil price forecasts for this year and next, citing a possible increase in OPEC+ oil production later this year that would push the market into surplus in 2025.
"Judging by the fall in oil prices, the market had expected another extension - indeed we thought the unwinding would be more likely to start on 1 April 2025. The earlier return of OPEC+ barrels is incrementally bearish," HSBC said in a note on Monday.
A panel of top ministers from the OPEC+ producer group meets on Oct. 2 to review the market, with no policy changes expected.
Starting in December, the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia is scheduled to raise output by 180,000 barrels per day each month.
Beyond that, there will remain a significant amount of OPEC+ spare capacity and non-OPEC output growth remains solid, while demand growth is slowing due to the energy transition, HSBC said.
The bank expects the oil market to be in a 0.6 million barrel per day surplus in 2025, including a more than 1 mbpd surplus during the seasonally weak first quarter.
It cut its 2024 price view for Brent by $2.1 to $79.6 per barrel and for WTI by $2.2 to $75.7 per barrel. It also revised down its 2025 price projections for Brent to $70 per barrel from $76.5 and for WTI to $67 per barrel from 73.50.
Brent crude futures LCOc1 were down 49 cents, or 0.7%, at $71.21 a barrel by 1218 GMT. U.S. crude futures CLc1 were also down 52 cents, or 0.6%, at $67.73. O/R
"The only near-term mechanism which would be able to limit further declines in oil prices into the $60's/b would be large-scale purchases of strategic petroleum reserves by China," HSBC added.
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 | $75 | $76 | $71 | Sept.6 |
JP Morgan | $82 | $75 | $77 | $71 | Sept.5 |
NAB | $82.7 | $80 | - | - | Sept.5 |
Goldman Sachs | $82 | $77 | $78 | $72 | Aug. 27 |
Citi Research | $80 | $60 | $76 | $57 | Aug. 25 |
DNB | $82 | $77 | - | - | Aug. 20 |
Barclays | $87 | $90 | $83 | $86 | June. 27 |
BMI | $85 | $82 | $82 | $79 | Aug. 22 |
Morgan Stanley | $75 | $71 | - | Jan. 3 | |
JP Morgan | $83 | $75 | $79 | $71 | Aug. 1 |
* 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 Anushree Mukherjee and Swati Verma in Bengaluru; Editing by Jan Harvey
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