JPMorgan Sees OPEC+ Holding Output Steady for Another Year

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JPMorgan expects OPEC+ to maintain its current production levels for at least another year, leading to an average price of $75 for Brent crude in 2025, JP Morgan said in a note on Thursday.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, on Thursday said they agreed to delay a planned oil output increase for October and November and could further pause or reverse the hikes if needed.

The move came as Brent oil prices held at a 14-month low below $73 a barrel on worries about demand in the U.S. and China and a likely rise in supplies out of Libya.

JPMorgan said the opportunity to phase out production cuts is now closed and sees prices dipping into the low $60s by the end of 2025.

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“$60 is not a good price for neither producers nor consumers, and OPEC would need to cut 1 million barrels per day (mbd) deeper, were the alliance to adhere to market management,” the bank said.

The market is now seeking a price point that will deter OPEC+ from introducing unneeded supply due to significantly softer demand anticipated in 2025, JPMorgan said.

Reflecting the recent slide in oil prices, the bank lowered its 2024 fourth quarter forecast for oil prices to $80 from $85 a barrel.

(Reporting by Anmol Choubey in Bengaluru; Editing by Sonali Paul)