New Delhi [India], June 27 : Global crude oil prices are likely to see downside, weighed down by the de-escalation of the Israel-Iran conflict, soft demand and increasing supply, revealed a latest research report by ICICI Bank.
On the demand side, the report believes that if the negative impulse regarding the trade war remains in place, it will lead to depressed demand.
Additionally, crude oil demand is expected to remain flat in 2025, coming in at relatively unchanged levels of 102.9mbpd as was seen in 2024, taking into account the subdued global growth momentum.
On the supply side, the global supply of crude followed an upward trajectory on a sequential basis, led by higher production from OPEC, while non-OPEC supply continued to remain fairly robust.
"The physical markets recorded a net supply surplus for the fifth consecutive month of 1.6mbpd in May compared to 1.9mbpd recorded in April," ICICI Bank said.
The demand showed a rise of 0.3mbpd to 102.6mbpd in May. However, this supply-demand equation was not adequate to match the supply of 104.2mbpd that is being driven by increasing output from OPEC.
However, the report also highlights that the spike in crude prices in response to the Iran-Israel conflict was much lower than previous geopolitical events such as the Russia-Ukraine war, reflecting an oversupplied physical market that is prevailing at the current juncture.
ICICI bank report reiterates its forecast for crude, it said, "We subsequently maintain our trading range of USD 60/bbl to USD 70/bbl for the remainder of 2025 and emphasise that prices should trade with a downside bias averaging USD 65/bbl for the period."
Adding, "the main source of upside risk is likely to come from a possible escalation in the geo-political conflict, although markets will respond more to whether there is a disruption in supply."
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor