Forecast Update - December 2024
Update of Brent and WTI forecasts.
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At the beginning of each month, we will be sending you an email like this with an updated forecast of energy prices. Commodia brings together top academic economists who specialize in the analysis of global energy markets. The team has more than 20 years of experience from leading universities across the United States, Canada, Europe, and the Asia Pacific. Our forecasts are based on state-of-the-art forecasting techniques to predict energy commodity prices.
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🛢️Oil Market - November Summary
In November 2024, oil prices experienced notable fluctuations driven by shifting market conditions and geopolitical developments. Brent crude prices averaged $74.38 per barrel, down slightly from October's levels, as concerns over global demand continued to weigh on the market. Early in the month, prices showed some resilience amid fears of supply disruptions linked to ongoing geopolitical tensions in the Middle East.
However, these fears eased as diplomatic efforts gained traction, leading to a decline in Brent to $71.50 per barrel by the end of November. OPEC+ maintained its production cuts, contributing to the market's mixed dynamics and continued volatility.
🟧 Commodia - Forecast Update of Brent
📈 Comparison of Commodia Forecast vs. ICE Future Price
In December 2024, Commodia forecasts Brent crude oil at $73.91 per barrel, which is 1.2% higher than ICE's forward price of $73.05 per barrel. By March 2025, Commodia's forecast rises to $75.20 per barrel, approximately 2.6% higherthan ICE's forward price of $73.26 per barrel.
By June 2025, Commodia anticipates a price of $76.47 per barrel, which is 5.4% higher than ICE's forward price of $72.55 per barrel. In December 2025, Commodia projects $77.58 per barrel, 8.7% higher than ICE's forward price of $71.40 per barrel.
Looking further ahead to December 2026, Commodia forecasts a price of $81.45 per barrel, which is 18.2% higher than ICE's forward price of $68.91 per barrel.
🟥 Commodia - Forecast Update of WTI
📈 Comparison of Commodia Forecast vs. NYMEX Future Price
In December 2024, Commodia forecasts Brent crude oil at $69.84 per barrel, which is 0.2% higher than NYMEX's forward price of $69.72 per barrel. By March 2025, Commodia's forecast rises to $72.24 per barrel, approximately 4.2% higher than NYMEX's forward price of $69.33 per barrel.
By June 2025, Commodia anticipates a price of $73.18 per barrel, which is 6.5% higher than NYMEX's forward priceof $68.73 per barrel. In December 2025, Commodia projects $74.52 per barrel, 10.4% higher than NYMEX's forward price of $67.48 per barrel.
Looking further ahead to December 2026, Commodia forecasts a price of $78.25 per barrel, which is 19.4% higher than NYMEX's forward price of $65.53 per barrel.
🗝 Key drivers of Commodia’s crude oil forecast from the previous month
The main variables influencing Commodia's crude oil forecast (Brent and WTI) are global fuel consumption, global economic conditions, and OECD petroleum inventories. The main change in our forecast from November is the decline in global fuel consumption, which has put downward pressure on our oil price forecasts (1.6% decrease in WTI and 3.29% in Brent).
The main determinants of Global Economic Conditions are shown in the figure below:
Chart of Main Drivers of Global Economic Conditions from Christiane Baumeister & Dimitris Korobilis & Thomas K. Lee, 2022. "Energy Markets and Global Economic Conditions" The Review of Economics and Statistics, 104(4), 828-844.
The main determinants of Global Economic Conditions are shown in the figure above for the period January 2020 to November 2024.
For more details about the Global Economic Conditions index visit: https://sites.google.com/site/cjsbaumeister/research
References
International Energy Agency (IEA). (2024). Oil Market Report - May 2024.
U.S. Energy Information Administration (EIA). (2024). Short-Term Energy Outlook - May 2024.
BNN Bloomberg. (2024). Oil Markets Look ‘Reasonably Well Supplied’ in 2024.
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Commodia Team