Macquarie in a recent note observed a shift in the oil market’s perception of the 2025 balance, noting a less bearish outlook.
This change in sentiment is attributed to smaller-than-expected inventory builds in the fourth quarter of 2024 and revised expectations for lower U.S. supply growth.
Despite these factors, the market has not seen sustained price rallies as the consensus for 2025 still predicts surplus balances.
Macquarie’s analysis suggests that if Brent crude prices remain above $70 per barrel by the second quarter of 2025, the prevailing bearish thesis may require reevaluation, considering $70 as a key support level.
Last week, Brent crude experienced an approximate $3 per barrel increase due to heightened Russian sanctions risks, political developments in Syria, Chinese economic stimulus measures, and potential short squeezes.
However, the upward momentum was tempered by uncertainty regarding the longevity and impact of these factors, coupled with the expectation of heavy surplus balances in 2025.
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