BofA: Rising non-OPEC+ oil supply may create market surplus in 2025

The oil market is bracing for a weaker balance between supply and demand, as outlined in a recent BofA Global Research report seen by RigZone. The report points to an increase in non-OPEC+ oil production, particularly from Brazil, Guyana, Canada and the United States, which is expected to increase by about one million barrels per day in 2024 and by 1.6 million barrels per day in 2025. This increase comes as OPEC+ considers putting additional barrels back on the market later in the year, potentially adding to the glut.

At the same time, growth in global oil demand is showing signs of slowing, driven in part by the increasing penetration of electric vehicles, particularly in markets such as China. BofA projections indicate that global oil demand will increase by about one million barrels per day in 2024 and by 1.1 million barrels per day in 2025. These figures suggest that the market could see a surplus of 700,000 barrels per day in 2025, leading to significant growth. build-up in both commercial and strategic oil stocks, the report suggests.

The report also forecasts Brent crude oil prices to average $86 per barrel in 2024 before falling to $80 per barrel in 2025, reflecting anticipated softer market conditions.

Adding to the complex picture, recent data points to weaker demand from China, a key oil importer. China’s crude oil imports from Russia fell 7.4% year-on-year in July to the lowest level since September 2022. The decline is attributed to sluggish domestic fuel demand and slower economic growth, compounded by ongoing challenges in the sector Chinese real estate.

Bank of America executives told Bloomberg in March that the bank is looking to expand its business related to the energy transition, including by boosting carbon trading and the natural gas market.

By Julianne Geiger for Oilprice.com

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