Renta 4 | The International Energy Agency’s (IEA) December oil report was published last Thursday, revising downwards its demand growth estimate for this year (+840k boe/d against 920k boe/d previously) and increasing it for 2025 (+1.1 million boe/d against +0.99 million boe/d previously) to 103.9 mln boe/d. It also published its estimate for total oil supply growth of +630k boe/d this year and +1.9 mln boe/d in 2025, to 104.8 mln boe/d, even if OPEC+ cuts are not reversed, driven mainly by non-OPEC+ countries such as the US, Brazil, Guyana, Canada and Argentina.
This report comes a day after the US Energy Information Administration (EIA) will release its December report expecting world oil production growth of +1.6 million boe/d to 104.24 million boe/d in 2025, where they also expect almost 90% of that growth to come from non-OPEC+ countries, while estimating +1.3 million boe/d growth in demand to 104.32 million boe/d, and an average Brent price of around $74/b for the year, with oil markets relatively balanced on an annual average basis.
Likewise, after extending last week, for the third time, its production cuts until March 2025, OPEC published its December oil report, cutting for the fifth consecutive month its oil demand growth forecasts for this year and next, in what is its largest reduction in estimates for this year to date (down 210k boe/d to +1.6 million boe/d and 103.82 million boe/d in 2024), while for 2025 it forecasts a demand growth of 1.4 million boe/d (90.000 boe/d down on previous estimate) to 105.3 million boe/d. On the supply side, they estimate growth of +1.3 million boe/d in 2024 and +1.1 mln boe/d in 2025 from non-OPEC countries, while OPEC+ production will gradually increase from April 2025, and may stop or reverse depending on market conditions, to a total of about +1.2 mln boe/d by the end of the year, according to the agreement reached last week.
In this context, the market continues to see some oversupply in 2025, with the futures curve pointing to Brent crude around $73/b in January ’25 and towards $70/b by the end of 2025, compared to $73.7/b yesterday.
