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Oil prices held back by oversupply concerns
The currency strategists at Macquarie are thrilled to report improved sentiment in the global oil market! Recently, Macquarie analysts noted a positive shift in how market participants view oil. This is largely driven by positive forecasts for oil prices in 2025.
The change in mood is explained by smaller-than-expected stockpile growth in the fourth quarter of 2024 and revised expectations of slower supply growth in the United States. However, despite these factors, oil prices are not showing steady growth. What is more, the consensus forecast for 2025 points to an oversupply of hydrocarbons.
Macquarie analysts believe that if Brent oil prices stay above $70 per barrel in the second quarter of 2025, the current bearish theory will need to be reconsidered. For now, $70 per barrel remains a key support level.
From December 16 to 21, Brent crude rose by nearly $3 per barrel. The increase could be explained by heightened risks of new sanctions against Russia, political turmoil in Syria, and economic stimulus measures in China. In addition, a large-scale short squeeze may have contributed to the price increase.
The upward momentum in oil prices is held back by uncertainty about how these factors will play out and expectations of significant oversupply in 2025.
Published 25 December 2024
© InstaFintech Group
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© InstaFintech Group
