Forecast Update - March 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 - February 2024 Summary
In February 2025, oil prices hit their lowest levels of the year, with Brent settling at $73.33 per barrel and WTI at $71.78 per barrel, amid global economic concerns and potential sanction relief for Russia. Asia's crude imports declined, particularly in China, while the global oil supply dropped by 950,000 bpd due to weather disruptions and output declines in Nigeria and Libya. The U.S. tightened sanctions on Venezuela, reducing its oil exports by 34%, while BP announced a shift back toward fossil fuel production. Despite these fluctuations, OPEC maintained its forecast for strong oil demand growth, projecting increases of 1.45 million bpd in 2025 and 1.43 million bpd in 2026.
🟧 Commodia - Forecast Update of Brent
📈 Comparison of Commodia Forecast vs. ICE Future Price
In March 2025, Commodia forecasts Brent crude oil at $75.08 per barrel, 2.4% higher than ICE's forward price of $73.32 per barrel. By June 2025, Commodia projects $76.30 per barrel, 5.1% higher than ICE's forward price of $72.58 per barrel.
By September 2025, Commodia anticipates $76.89 per barrel, which is 8.1% higher than ICE's forward price of $71.12 per barrel. In March 2026, Commodia's forecast rises to $78.92 per barrel, 14.3% higher than ICE's forward price of $69.06 per barrel. Looking further ahead to March 2027, Commodia forecasts a price of $82.25 per barrel, which is 21.7% higher than ICE's forward price of $67.58 per barrel.
🟥 Commodia - Forecast Update of WTI
📈 Comparison of Commodia Forecast vs. NYMEX Future Price
In March 2025, Commodia forecasts WTI crude oil at $71.78 per barrel, 0.7% higher than NYMEX's forward priceof $71.25 per barrel. By June 2025, Commodia's forecast rises to $72.23 per barrel, 4.9% higher than NYMEX's forward price of $68.87 per barrel.
By September 2025, Commodia projects $72.68 per barrel, which is 8.0% higher than NYMEX's forward price of $67.34 per barrel. In March 2026, Commodia's forecast climbs to $74.51 per barrel, 14.2% higher than NYMEX's forward price of $65.23 per barrel. Looking further ahead to March 2027, Commodia forecasts a price of $77.37 per barrel, which is 21.7% higher than NYMEX's forward price of $63.56 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 February is due to the decline of global economic conditions, which has put downward pressure on our oil price forecasts (8.01% decline in WTI and 5.90% 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 February 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