In August, Rabobank lowered Brent forecasts for Q4 2024 to $82 from $86. Additionally, they also moved our 2025 full-year forecast down to $85/bbl from $92/bbl as the market moved into balance from deficit according to estimates, Rabobank’s economists note.

Markets look to be oversupplied next year

“Recent confirmation of poor Chinese and US demand data and a looming glut of supply with a long-term demographic shift have caused us to revisit our models and forecasts: we now expect Brent to average $71 in Q4 2024. Further out, we forecast 2025 prices to average $70, 2026 to rise to $72, and 2027 to trade around the $75 mark.”

“According to our sensitivity analysis, a half-million barrel per day oversupply implies a $10 shift in Brent prices. Markets look to be oversupplied next year by about 700,000 barrels per day, which reflects the dramatic move in our forecasts.”

“We still await the flattening and decline of US tight oil production in 2025 alongside Russian compensation cuts to inject some price appreciation later in the year and in 2026, but overall the market looks to be on a longer-term flat trajectory. Lower prices in the US will discourage new drilling.”