Vitality, crude oil costs outlook for 2025, in line with Raymond James

Investing.com — Raymond James analysts offered a cautious outlook for the power sector in 2025. 

Regardless of power’s underperformance over the previous two years, the midstream group emerged as a brilliant spot in 2024, with the Alerian/AMNA index surging 37% and Raymond (NS:RYMD) James’ midstream protection group up 41%.

Geopolitical tensions, similar to the continuing battle in Ukraine and up to date Center East confrontations, have had little impression on oil market fundamentals. 

“Oil worth volatility continues to be pushed by slightly old school provide and demand elements,” the analysts notice. 

They spotlight blended messages from OPEC and weak demand from China as key contributors to the present market uncertainty. Moreover, the power of the U.S. greenback, notably across the U.S. election, can be exerting downward strain on oil costs.

Wanting forward, Raymond James forecasts West Texas Intermediate (WTI) crude to common $70 per barrel in 2025, barely above the futures strip, with Brent crude carrying a $5 premium. 

In distinction, U.S. pure fuel costs are anticipated to common $4 per Mcf, considerably increased than present futures costs.

A notable theme for 2025 is the continued impression of synthetic intelligence (AI) on the power sector. 

“AI stays the number-one story within the power sector,” Raymond James states. “Accommodating this incremental demand will take an all-of-the-above technique: fuel, renewables, and – in sure circumstances, and with very lengthy lead instances – nuclear as nicely.”

“The power sector at the moment sits at solely ~3% of S&P market cap, however investor sentiment nonetheless stays above pre-COVID ranges. That being stated, near-term uncertainty concerning the commodities (specifically oil) has left buyers with little conviction in the meanwhile,” concluded the agency.