Oil Daily | OPEC Cuts 2025 Demand Forecast Amid Economic Woes; U.S. Shale Resilient Despite Low Prices

【Global Oil Supply and Demand】

OPEC has adjusted its oil demand growth forecast for 2025 due to trade tensions and weak economic indicators. The demand increase is now projected at 1.3 million barrels per day, down by 150,000 bpd from its previous estimate. The 2026 forecast is similarly revised downward to 1.28 million bpd.

U.S. shale producers are resilient despite low prices, with costs reduced and innovation ongoing. Despite breakeven levels near $65 and WTI around $60, U.S. Energy Secretary Chris Wright remains optimistic, citing historical resilience and predicting survival without the need for $80 oil prices.

Despite last week's market turmoil, Gunvor's Frederic Lasserre believes the market overreacted and sees more upside potential. Brent Crude prices temporarily dipped below $60 per barrel due to recession fears. President Trump's 90-day tariff pause led to a recovery, but trade war uncertainties persist.

【Oil-Producing Countries Dynamics】

Russia's energy plan indicates flat crude oil production until 2050, with output expected at 540 million metric tons by the decade's end. Despite sanctions, Moscow aims to boost gas exports, anticipating significant increases in LNG and pipeline supplies by 2030.

Brazil plans an oil drilling rights auction in environmentally sensitive areas, facing opposition from authorities and indigenous groups. Petrobras seeks to drill in the resource-rich Foz do Amazonas, but environmental hurdles and indigenous rights make the auction challenging.

【Latest Oil Policies】

The European Union seeks legal means to end long-term gas supply contracts with Russia's Gazprom without penalties. Despite efforts to reduce imports, LNG purchases from Russia have increased. EU business leaders suggest resuming some Russian gas imports to lower prices.

【Industry News】

The Keystone pipeline is set to resume operation after a leak shutdown. South Bow, the operator, aims for an April 15 restart following a corrective action order. The pipeline is crucial for connecting Alberta's crude supplies to U.S. markets.

The EU considers a deal to purchase American LNG, potentially aggregating demand to address U.S. trade deficit concerns. President Trump suggested significant energy purchases for tariff relief, prompting the EU to explore competitive bulk-buy offers.

【Company News】

BP announced a new oil discovery in the U.S. Gulf of Mexico, aligning with its strategy to focus on oil and gas production growth. The Far South prospect could be commercially viable, contributing to BP's plan to enhance upstream production capacity.

【Others】

Gasoline and diesel prices in the U.S. saw a decline, with gasoline dropping 8.2 cents per gallon. The decrease follows oil price drops amid U.S. tariffs and OPEC's faster-than-expected production recovery, signaling potential stabilization in market prices.