Analysts have revised down their oil price forecasts for the third consecutive month as swelling OPEC+ supply and lingering uncertainty around the impact of trade disputes on fuel demand weigh on prices, a Reuters poll showed.
A survey of 40 economists and analysts in May forecasts Brent crude will average $66.98 per barrel in 2025, down from April’s $68.98 forecast, while U.S. crude is seen at $63.35, below last month’s $65.08 estimate. Prices have averaged roughly $71.08 and $67.56 so far this year respectively, as per LSEG data.
While tensions have somewhat eased between the U.S. and other trade partners, trade conflicts still loom as a key factor that could weaken oil demand, said Tobias Keller, analyst at UniCredit.
“On the supply side, oil prices will be heavily influenced by OPEC+ production decisions, while geopolitical tensions… pose ongoing risks of disruption and price volatility,” Keller added.
Eight OPEC+ members began unwinding output cuts earlier this year, agreeing to larger-than-expected increases of 411,000 bpd for May and June. The members may decide on a similar output hike for July at a meeting on Saturday, sources have told Reuters.
The move “seems driven by a desire to punish non-compliant members rather than support oil prices at any specific level. Compliance will be hard to enforce, especially in Kazakhstan,” said Suvro Sarkar, lead energy analyst at DBS Bank.
Meanwhile, analysts polled by Reuters expect global oil demand to grow by an average of 775,000 barrels per day in 2025, with many pointing to elevated trade uncertainty and the risk of economic slowdown as key concerns. This compares to the 740,000 bpd 2025 average demand growth forecast from the International Energy Agency earlier this month.
With U.S. consumption and China oil demand constrained by fuel efficiency gains, economic uncertainty and the shift to electric mobility, “demand growth is largely coming from the resource nations themselves,” said Norbert Ruecker, head of economics & next generation research at Julius Baer.
Meanwhile, Russia’s war in Ukraine continues to pose a geopolitical risk premium for oil. Analysts say markets have largely priced in the uncertainty.
“Potential de-escalation efforts and the possibility of lifting sanctions on Russian oil could further lower prices,” said Sarkar.
