Oil prices to remain stable in 2024, drop in 2025: JP Morgan

November 20, 2023 (MLN): The global oil benchmark, Brent, is expected to remain largely flat in 2024 as OPEC maintains supply restraint, Bloomberg reported.

However, prices are anticipated to dip in 2025 as the market balance loosens.

Analysts at JP Morgan Chase & Co, including Natasha Kaneva, project an average price of $81/bbl for this year, $83/bbl in 2024, and $75/bbl in 2025, as outlined in a note dated November 20.

In 2023, demand is on track to grow by 1.9m b/d, although non-OPEC supply is expected to surpass this with a 2.2m b/d expansion, primarily driven by a 1.5m b/d increase in U.S. output.

OPEC had to cut production to balance markets, Bloomberg added.

Looking ahead to 2024, demand is expected to climb by 1.6m b/d, supported by robust emerging-market economies, a resilient U.S., and a weak-but-stable Europe.

Two-thirds of demand growth is expected to come from economic expansion, while the continued normalization of jet fuel is anticipated to feed the rest.

However, supply growth in 2024 from non-OPEC producers is seen at 1.7m b/d, more than matching gains in demand.

Analysts suggest that to keep the oil market balanced, the OPEC alliance would need to continue constraining production.

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