Analysts at Wall Street bank Wells Fargo have predicted that oil prices will remain lower through 2025 due to the elevated risk of a global oversupply.
According to the experts, a combination of persistent growth of U.S. shale production as well as slowing demand from key economies, especially China, are the key bearish drivers. Wells Fargo says the anticipated easing of OPEC production cuts by the end of 2024 further supports the likelihood of a supply surplus in 2025 despite current market tightness. Wells Fargo has predicted that global oil supply will rise from 102.8 million bpd in 2024 to 104.
“We are not calling for a repeat of 1998 in 2025, but we fully comprehend investor angst given economic uncertainties in China and OPEC's stated desire to reverse its curtailments,” the analysts said. However, growth in U.S. shale supply is unlikely to play a major role in global oversupply as it did in recent years. U.S. oil output increased by a mere 0.1 million bpd through the end of the third quarter, well below an average of 0.6 million bpd in previous growth years.
Oil Supply Oil Demand Oil Prices Wells Fargo OPEC+
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