The Australian Australian Group Ltd. expected the price of oil to decline to its lowest level at $ 60 a barrel, a level that the market has not seen since 2021, with the continued surplus supply in the markets, and indicated that the refining sector is suffering more amid the current trade war.
Brent crude futures earlier this month reached its lowest level in 3 years at about 68 dollars, as global economic expectations have increased from concerns about demand in a year in which global oil production growth is expected to increase significantly.
This development represents the opposite of what oil recorded in mid -January, when the price of a barrel exceeded $ 80, driven by major US sanctions on Russia.
The expected price
“We are still pessimistic, but we are not the same pessimism that we were at $ 80 for clear reasons … our price goals relate to the price that can be preserved, and for us it is in the sixties (below $ 70),” Bloomberg quoted Vikas Duvidi, a global economist in the oil and gas field in Macquari.
Global demand for oil is under pressure due to the escalation of the trade war, while OPEC Plus is reproducing, and the International Energy Agency stated this month that this threatens to deepen the surplus of the supply, and the Goldman Sachs Group was among the companies that recently reduced oil prices.
However, Duvidy ruled out that the price of crude oil has decreased much more than its lowest level at $ 60 a barrel, with the possibility of the additional supplies from the United States and the Organization of Petroleum Exporting Countries (OPEC) and its allies if prices drop a lot from $ 60.
In the latest transactions, the price of Brent crude rose 0.72% to $ 74.15 a barrel, and the American crude barrel increased 0.37% to $ 69.62.
A Reuters poll also showed that oil prices will remain under pressure in 2025, as American customs duties and the slowdown in economic growth in India and China are on demand, while OPEC Plus is moving forward in its plans to increase production.
The survey expected that the average price of Brent crude would reach $ 72.94 a barrel in 2025, down from last February estimates of $ 74.63.
It is expected that the average US crude price will reach $ 69.16 a barrel, a slight decrease from last month’s expectations of $ 70.
Florian Grunberger, chief analyst at Kepler, said that with the expected widening of the international crude oil balances 300,000 barrels per day this year, the market swings on the edge of a surplus.
He added, “This shift is due to the weakness of the total economic expectations in China and the weak demand from India, which instead of even overcoming the slight improvement in European demand.”
The refining sector crisis
Duvidi said that the bank is “pessimistic” about refining and diesel margins, adding that fuel “suffers more” in the trade war, however, highlighted the closure of some Chinese factories, recalling that if the oil processing energy is ultimately decreased at a faster than the demand for oil, the long -term expectations of repeated products may be more positive.
“Starting next year, there will be many future new oil refining energy,” he said. Therefore, it is sufficient that the demand for oil is not very bad, and then more strict financial balances can be achieved.
