Forecast Update - February 2025
Update of Brent and WTI forecasts.
Dear subscribers,
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 - Jannuary 2025 Summary
In January 2025, the oil market experienced a decline in OPEC production for the second consecutive month, with Nigeria and Iran reducing output, while Libya saw a slight increase. The U.S. administration's imposition of additional tariffs on Chinese imports raised concerns about potential decreases in oil demand from China. In response, China announced tariffs on U.S. oil imports, further escalating trade tensions and impacting market sentiment. Additionally, the U.S. reinstated strict sanctions on Iran, aiming to curb its oil exports.
🟧 Commodia - Forecast Update of Brent
📈 Comparison of Commodia Forecast vs. ICE Future Price
In February 2025, Commodia forecasts Brent crude oil at $80.88 per barrel, which is 6% higher than ICE's forward price of $76.27 per barrel. By May 2025, Commodia's forecast rises to $82.08 per barrel, approximately 11.6% higherthan ICE's forward price of $73.57 per barrel.
By August 2025, Commodia anticipates a price of $82.84 per barrel, which is 14.7% higher than ICE's forward priceof $72.27 per barrel. In February 2026, Commodia forecasts $84.33 per barrel, which is 19.5% higher than ICE's forward price of $70.56 per barrel. By February 2027, Commodia's forecast reaches $87.41 per barrel, 27.3% higherthan ICE's forward price of $68.69 per barrel.
🟥 Commodia - Forecast Update of WTI
📈 Comparison of Commodia Forecast vs. NYMEX Future Price
In February 2025, Commodia forecasts Brent crude oil at $77.52 per barrel, which is 2.7% higher than NYMEX's forward price of $75.50 per barrel. By May 2025, Commodia's forecast rises to $79.11 per barrel, approximately 10.4% higher than NYMEX's forward price of $71.67 per barrel.
By August 2025, Commodia anticipates a price of $79.22 per barrel, which is 12.7% higher than NYMEX's forward price of $70.31 per barrel. In February 2026, Commodia forecasts $81.47 per barrel, which is 20.9% higher than NYMEX's forward price of $67.41 per barrel. By February 2027, Commodia's forecast reaches $84.10 per barrel, 29.0% higher than NYMEX's forward price of $65.19 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 January is the strengthen of Global Economic Conditions, which has put upward pressure on our oil price forecasts (5.32% increase in WTI and 8.92% 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 January 2025.
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