As oil costs proceed bumpy trip, UBS turns extra constructive amid demand hopes

Invesing.com — Crude oil costs had a rocky trip this 12 months as issues about oversupply and timid demand remained entrance and heart, with boosts from geopolitical tensions proving fleeting, however UBS believes subsequent 12 months could possibly be extra constructive for ‘black gold.’

“Crude oil ought to profit from OPEC +’s ongoing provide administration, rising speculative positioning, and low oil inventories, analysts at UBS stated in a current be aware. 

The analysts expects Brent Oil Futures to rise to $80 per barrel and Crude Oil WTI Futures to $75 per barrel in 2025. 

An enhancing demand outlook is on the crux of the analysts’ reasonably constructive view on crude as they forecast “virtually balanced oil market in 2025 (modest surplus of 0.1mbpd), following a deficit of 0.2mbpd in 2024.”

International oil demand to develop by round 1.2 million barrels per day subsequent 12 months,  the analysts estimate, according to the long-term progress fee. The uptick in progress is anticipated to be primarily pushed by rising markets, with India and China main the way in which.

That estimate nonetheless barely trails OPEC’s forecast of 1.4M bpd for 2025. 

On the availability facet, in the meantime, UBS anticipates non-OPEC+ provide to develop by round 1.3 million barrels per day in 2025, with the US, Latin America, and Canada as key contributors.

President-elect Donald Trump’s insurance policies current each bullish and bearish dangers for oil costs. Potential renewed sanctions on international locations like Iran and Venezuela might result in provide disruptions, whereas tariffs might weigh on progress prospects.