Oil Price Forecasts Edge Up Amid Geopolitical Tensions
A recent Reuters poll suggests a marginal increase in oil price forecasts, driven by heightened geopolitical tensions in the Middle East. However, rising OPEC+ supply and a tempered demand outlook continue to exert downward pressure on crude oil prices.
Key Findings from the Reuters Poll
The survey, which included 40 economists and analysts, projects Brent crude to average $67.86 per barrel in 2025. This is a slight increase from May's forecast of $66.98. U.S. crude is expected to average $64.51, up from last month's estimate of $63.35.
Analysts suggest that unless the Iran-Israel conflict escalates significantly, prices will likely stabilize based on market fundamentals.
OPEC+ Impact on the Market
OPEC+'s decision to increase oil production is also influencing market sentiment. The group agreed in May to another increase of 411,000 barrels per day of oil for July, bringing the total increases made or announced since April to 1.37 million bpd. This increase impacts the market sentiment already affected by the U.S. trade policy.
Demand Concerns Persist
While a potential U.S.-China trade deal offers some support to oil demand, its overall impact is anticipated to be limited and shaped by broader economic and supply dynamics.