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Filipse 66 oil refinery in California.
Bing Guang | Reuters
The forecast for oil prices gets into more bearish forecasts at the back of the wide and market tariffs of US President Donald Trump. Enterprises and investors are worried that a trade war and a decrease in global growth is ahead.
On Thursday, Goldman Sachs reduced the December 2025 forecasts for the global and US landmarks Brent Crude and WTI by $ 5 to $ 62 and $ 62, “because the two key risks we designated, namely the escalation of tariffs and slightly higher OPEC+ supplies.”
The Bank also reduced its oil landmarks in 2025 and 2026, adding that “we no longer predict the price range because the price volatility will probably remain increased at increasing the risk of recession.” S&P Global Market Intelligence Analysts predict that in the worst case, oil demand growth can be reduced by 500,000 barrels per day.
JPMorgan, for its part, increased the chances of recession for the world economy to 60% this year, which is 40% compared to the previous forecast.
Thus, the markets were stunned when OPEC produces about 40% of the world’s crude oil with allies that are not OPEC Almost three times the expected figure.
Eight OPEC+ key manufacturers on Thursday agreed to collect a combined amount of crude oil for 411,000 barrels per day, speeding up their hikes and pushed oil prices. Group – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman – next month next month will increase an increase of less than 140,000 barrels.
News pushed oil prices 6% lower.
OPEC+ Bullishness and Trump’s respect
Several factors are at the heart of the alliance that produces oil. The first is that the group is in demand for oil at the end of the year, putting it into the minority when the interest views sour and the fears of global slowing are worsening.
Eight OPEC+members behind the production decision referred to “permanent basics of healthy market and a positive market forecast” in their statement On Thursday, saying that “this measure will allow the participants to speed up their compensation.”
The statement added that “a gradual increase can be stopped or reversed depending on developing market conditions.”
Another likely reason for the group’s move is related to another word T: a man in the White House, who during his first term in office and from the very beginning of the second, loudly demanded that the group of oil producers are more rough to help reduce the prices for Americans.
“First of all, this is partly about Trump’s admiration,” said Saul Kavonik, head of the energy research department at MST Marquee on Friday.
“Trump will put pressure on OPEC to reduce oil prices, which reduces world energy prices to help offset the inflationary impact of its tariffs.”
OPEC representatives denied that this step was taken to reassure Trump.
Matching and market share
Meanwhile, since compliance with the requirements is the main problem for OPEC+ – with countries that have overfilled the raw outside its quotas, complicating the efforts of the control group, how much supplies it allows on the market – this step can be a way of performing this, according to Helim Croft, head of the Global Product Strategy and Mena research in the RBC Capital Markets.
“We believe that the desire of the OPEC management to send a warning to Kazakhstan, Iraq and even Russia about the cost of further overproduction is at the heart of this decision.”
Helima Croft
Head of Global Commodity Strategy and Mena Research in RBC Capital Markets Markets
“We believe that the desire of the OPEC management to send a warning signal to Kazakhstan, Iraq and even Russia on the cost of further overproduction is at the heart of this decision,” Croft wrote in a note published on Thursday. It referred to the price war on oil in March 2020, when Saudi Arabia flooded the market for tank prices and forced Russia to return to fulfillment after Moscow initially refused to stop production to help the Alliance stabilize the prices. The price war has caused the prices of rough on Go to $ 15 a barrel.
Production increases are also an “example of increasing the share of the OPEC market”, – said Kavonich, adding that it “ultimately comes from the US (shale) patch”, which American manufacturers probably won’t be too excited.
What will happen next?
In the coming months, OPEC+ looks sure that the market is turning into the corner, that the demand for oil will increase in the summer and the tariff wars will be resolved in the coming months, said Nadar Itaim, the editorial office of Argus Media.
“These countries are heavily comfortable with $ 70, $ 75 a barrel,” Itim said.
What goes on depends on the tariff trajectory and the potential trade war. Analysts say oil declining in the range of $ 60 may pause or even cancellation plans for OPEC+production plans – although it will probably be met with resistance of countries such as Iraq and Kazakhstan, which have long been heard to increase oil production for their own income.
Whatever happens, the group supports the flexibility to adapt its plans month by month, Itim noted.
“If everything does not go the way they imagine everything you need is really a phone call.”
