Bankinter | OPEC cut its estimate for global oil demand. It justified its decision on the impact on the economy of tariffs and the information received in Q1. They estimate that demand will increase by 1.3 mbd in 2025 and 1.28 mbd in 2026, in both cases a reduction of 0.150 mbd compared to the previous estimate. This increase represents about 1.2% of global supply each year. In parallel, it reduces its estimate of global GDP growth to 3.0% from 3.1% previously in 2025 and 3.1% from 3.2% previously in 2026. On the other hand, March production fell to 41.02 mbd (down 37,000 bd) despite the fact that Kazakhstan again produced above its quota: 1.852 Mbd versus 1.468 Mbd target. Let’s remember that OPEC will increase its production by 138,000 bd from April and 411,000 bd from May.
Analysis team’s view: negative news for oil, as it combines lower demand and higher expected production. In our opinion, oil prices will moderate in the coming years due to the economic slowdown, largely caused by the tariff war, which impacts growth and inflation. But other factors also have an impact, such as global overproduction (especially from the US), the rise of alternative energies and greater global energy efficiency.
