Oil faces ‘punishing oversupply’ and US$50s prices — Macquarie.
Oil is forecast to drop into the US$50s-a-barrel (RM210.57) range in the coming quarters on expectations for “punishing oversupply” as output expands, according to Macquarie Group, which pared back price outlooks.
“We remain fundamentally bearish [on] the energy complex,” analysts including Marcus Garvey said in a quarterly outlook for a broad range of raw materials. Given crude-supply growth from Opec+, as well as from drillers outside the group, “as a base expectation, this sets up for punishing oversupply” in the period to year-end and in the first quarter of next year, they said.
Global oil benchmark Brent has dropped about 11% this year, including a back-to-back monthly drop in September, as Opec+ loosened supply curbs at a rapid clip in a bid to recapture market share. The alliance is due to meet this weekend to decide on output levels for November. Members will discuss fast-tracking more hikes, with three monthly installments of about 500,000 barrels a day, a delegate said. Opec, meanwhile, said there was no such plan.
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- Oil faces ‘punishing oversupply’ and US$50s prices — Macquarie
Oil faces ‘punishing oversupply’ and US$50s prices — Macquarie
By Rong Wei Neo / Bloomberg
01 Oct 2025, 04:05 pm
(Oct 1): Oil is forecast to drop into the US$50s-a-barrel (RM210.57) range in the coming quarters on expectations for “punishing oversupply” as output expands, according to Macquarie Group, which pared back price outlooks.
“We remain fundamentally bearish [on] the energy complex,” analysts including Marcus Garvey said in a quarterly outlook for a broad range of raw materials. Given crude-supply growth from Opec+, as well as from drillers outside the group, “as a base expectation, this sets up for punishing oversupply” in the period to year-end and in the first quarter of next year, they said.
Global oil benchmark Brent has dropped about 11% this year, including a back-to-back monthly drop in September, as Opec+ loosened supply curbs at a rapid clip in a bid to recapture market share. The alliance is due to meet this weekend to decide on output levels for November. Members will discuss fast-tracking more hikes, with three monthly installments of about 500,000 barrels a day, a delegate said. Opec, meanwhile, said there was no such plan.
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“While Saudi Arabia has shown no sign of relenting in its return of supply, absent such a reversal, we would expect the market to find itself in a ‘lower-for-longer’ environment,” they said. “Ultimately, we believe some combination of lower prices (slowing non-Opec supply), supply disruptions, Opec policy changes and time (allowing demand growth to chew into oversupply) will be required to return this market to balance.”
Among outlooks, West Texas Intermediate was expected to average about US$57 a barrel next year, down from an earlier forecast of about US$60, they said. Brent — which was last near US$66 — was seen at US$57 a barrel in the first quarter of next year and US$59 in the second, according to a table in the report.
Macquarie projected a global crude surplus of 4.63 million barrels a day in the first quarter of next year, followed by smaller surpluses in each of the next three quarters.
Source: Theedgemalaysia