Fitch sees Brent at $70/bbl in 2025

Global oil demand is likely to grow next year “in line with 2024, but more slowly than in 2022-2023,” global credit ratings firm Fitch Ratings has predicted.

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Slow growth oil demand growth will contribute to keep the price of Brent crude at around $70/bbl next year, declining from an average price of around $80/bbl this year, Fitch Ratings said.

Brent will also come under pressure from "higher production from non-OPEC+ countries, leading to oversupply,” the agency said.

Despite persisting geopolitical tensions in the Middle East, which is adding risk premiums to Brent’s price, a lot of spare production capacity in 2025 will keep a lid on oil, according to Fitch Ratings.

“Geopolitical tensions, particularly in the main producing regions, such as the Middle East, will continue to influence prices,” the US-based ratings agency said. “While these tensions pose risks, they are mitigated by OPEC+’s ability to manage supply,” it added.

Earlier this month, the Saudi Arabia-led oil producers group decided to extend its 2.2 million b/d production cuts through to March 2025.

The global oil market’s biggest concern currently is lacklustre demand growth in China, the world’s second-largest oil consumer. Chinese officials recently met to discuss more economic stimulus to be introduced next year. But the news did not provide much support to oil, analysts said.

Chinese state-owned refiner Sinopec said in its annual energy outlook that China's crude oil imports could peak as soon as 2025 and the country's oil consumption would peak by 2027, as demand weakens amid rising electric vehicle and LNG-fuelled truck sales.

By Aparupa Mazumder

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