ING sees Brent at $88 in Q3 2024

In its latest market note, ING states that OPEC+ policy is still the critical factor in determining the state of oil markets.

In early 2024, ING forecast Brent crude to trade above $90 a barrel in the second half of the year. This forecast has been made several times, and ING expects oil prices to peak again in the third quarter. However, no sustained rallies are anticipated. The key factor remains OPEC+ policy, as the group’s supply cuts have been instrumental in supporting the market.

According to ING, OPEC+ members have committed to further voluntary supply cuts totaling 2.2 million barrels per day through the third quarter. These cuts are expected to leave the market in a significant deficit in the coming months. However, as these cuts taper from the fourth quarter, the oil market should become more balanced on the supply side. As a result, ING expects oil prices to peak in the third quarter, before falling towards the end of the year and into 2025. Their forecast for Brent crude is $88 per barrel for the third quarter of 2024, falling to $80 per barrel for the entire period. year 2025. The key risk to this outlook is if OPEC+ decides to maintain the full extent of its cuts, which could extend the market deficit into 2025.

For natural gas, ING initially projected that European storage levels would exit the 2023/24 winter season between 45-50% full. However, the result was even better, with 58% storage capacity by the end of March. This unexpected surplus resulted from the continued weakening of gas demand. Moving forward, ING anticipates that natural gas prices in Europe will average €25 per megawatt-hour (MWh) in the third quarter, potentially reaching new lows to date if storage reaches 100% before the next season warming up. However, several risks could disrupt this scenario, including potential shutdowns of remaining Russian pipeline flows and robust Asian LNG demand diverting supplies from Europe.

As these developments unfold, ING believes that OPEC+ policy remains a crucial factor in shaping the oil market outlook for the latter part of 2024 and beyond, with the consortium’s strategic decisions dictating whether the market remains in deficit or reaches a more balanced state.

By Julianne Geiger for Oilprice.com

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