Market dynamics point to USD70-75 oil prices into 2025

Significance

OPEC+’s approach is crucial for oil prices and the budgets of the economies involved, and for global inflation and monetary policy. Tensions within OPEC, and between OPEC and non-OPEC members of OPEC+, would make it difficult for OPEC+ to deepen cuts or even sustain current levels.

Impacts

• Even on optimistic demand forecasts, the market deficit is unlikely to support OPEC+ raising output by more than 500,000 b/d.
• Higher output would lower oil prices, helping to ease inflation, boost demand, and head off some of the US supply competition.
• Core OPEC members may push for prioritising market share rather than defending price levels that seem difficult to sustain.