As oil prices continue bumpy ride, UBS turns more constructive amid demand hopes

Invesing.com -- Crude oil prices had a rocky ride this year as concerns about oversupply and timid demand remained front and center, with boosts from geopolitical tensions proving fleeting, but UBS believes next year could be more constructive for 'black gold.'

"Crude oil should benefit from OPEC +’s ongoing supply management, rising speculative positioning, and low oil inventories, analysts at UBS said in a recent note. 

The analysts expects Brent Oil Futures to rise to $80 per barrel and Crude Oil WTI Futures to $75 per barrel in 2025. 

An improving demand outlook is at the crux of the analysts' moderately constructive view on crude as they forecast "almost balanced oil market in 2025 (modest surplus of 0.1mbpd), following a deficit of 0.2mbpd in 2024."

Global oil demand to grow by around 1.2 million barrels per day next year,  the analysts estimate, in line with the long-term growth rate. The uptick in growth is expected to be primarily driven by emerging markets, with India and China leading the way.

That estimate still slightly trails OPEC's forecast of 1.4M bpd for 2025. 

On the supply side, meanwhile, UBS anticipates non-OPEC+ supply to grow by around 1.3 million barrels per day in 2025, with the US, Latin America, and Canada as key contributors.

President-elect Donald Trump's policies present both bullish and bearish risks for oil prices. Potential renewed sanctions on countries like Iran and Venezuela could lead to supply disruptions, while tariffs could weigh on growth prospects.

Source: Investing.com