What Do Oil Markets Expect from the Upcoming OPEC+ Meeting?

At Invest Oil LLC, we analyze every movement in the energy sector to anticipate and offer well-founded insights on crude oil prices and trends. The upcoming OPEC+ meeting, scheduled for December 1, 2024, is generating high expectations in international markets, especially after a year marked by production adjustments and fluctuations in global energy demand.

Background and Goals of OPEC+ for 2025

Since 2016, OPEC and its allies, led by Saudi Arabia and Russia, have maintained a proactive approach to stabilize prices through production cuts. These adjustments have been crucial in recent years to balance a market that has faced both post-pandemic recovery and increasing geopolitical tensions.

In the last quarter, the price of Brent crude, the global benchmark, has remained in the $80-$90 USD range. While WTI has fluctuated between $75 and $85 USD, the stability of both indexes will depend on the continuity or adjustment of production policies.

Key Factors for the Upcoming Meeting

1. Extension of Production Cuts

   • Current Situation: The current OPEC+ cuts have reduced production by approximately 1.66 million barrels per day (mbd), a strategy that has been key to preventing an oversupply that could reduce prices.

   • Projection: If OPEC+ decides to extend these cuts into 2025, we could see price increases, especially if global demand remains strong. This could push Brent prices to around $100 USD per barrel in the first half of 2025, depending on the response from Asian and U.S. markets.

2. Global Demand Projections

   • Growth in Asia: China, the world's second-largest economy, remains a key indicator for crude demand, with consumption continuing to rise despite adjustments in growth. If sustained, this could add up to 2 mbd to global demand in 2025.

   • Moderation in Europe and the U.S.: Conversely, Western markets show signs of slowing due to high interest rates and recession expectations. This mix of factors means global demand projections will heavily depend on Asia and other emerging economies, which OPEC+ will surely evaluate carefully in their next meeting.

3. Geopolitical Tensions and Sanctions

   • In the current context, any disruption in exports from major producers, whether due to Middle Eastern tensions or restrictions in countries like Iran and Venezuela, can directly affect prices. As we approach 2025, potential sanctions or restrictions could remove up to 1 mbd from the global market, creating an environment prone to volatility.

Invest Oil LLC's Perspective on Crude Prices in 2025

Considering the above factors, we project that:

• Scenario of Extension of Cuts: If cuts are extended, Brent prices are likely to remain in the $95-$100 USD range, while WTI could settle between $90-$95 USD.

• Adjustment Scenario: Should OPEC+ decide to increase production, prices could stabilize in the $85-$90 USD range for Brent and $80-$85 USD for WTI.

OPEC+ has demonstrated its commitment to maintaining a balanced market, and the December 1 meeting is likely to be another testament to their strategic approach. At Invest Oil LLC, we will closely monitor OPEC+ decisions to keep our partners informed and make well-founded decisions in such a dynamic and crucial market as crude oil.

Conclusion

The upcoming OPEC+ production adjustment will be decisive for the stability of oil prices and global supply. This event has the potential to set the direction for the energy market in 2025, and at Invest Oil LLC we are ready to help our clients navigate these complexities with clear focus and strategies that maximize performance.