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Enverus Intelligence^® Research (EIR), a subsidiary of Enverus, has released its latest Fundamental Edge report, which focuses on global drivers for oil and gas prices through 2030, the five-year oil and gas supply and demand outlook and price forecasts.

“Fourth-quarter oil balances are in a deficit. Global oil demand is at record levels, and crude and product stocks are low. Fundamentals alone suggest oil prices should be in the mid-to-high $80s,” said Al Salazar, report author and director at EIR.

“We also believe the markets have forgotten about the half-empty U.S. SPR. Therefore, any discussion of the current Brent prices having a geopolitical premium feels contradictory to us,” Salazar continued. “While Brent fluctuates on geopolitical news, we have yet to see a sustained price premium over fundamental fair value. Looking forward, we’ve downgraded our 2025 Brent price forecast by $5/bbl due to our conservative expectations on Chinese oil demand. President-elect Trump’s proposed import tariffs and increased global trade uncertainty complicates Beijing’s task of steering China’s trade-centric economy,” Salazar said.

As for natural gas, “the short-term hyper price elasticity of supply that has been present for the past year has started to break, suggesting the amount of highly price-elastic shut-in production is on its last legs. New supply will be needed soon, as activity levels remain alarmingly low.”

Key takeaways

• EIR expects increased volatility for Brent prices for 2025 as low stock levels, elevated geopolitical tensions and increased global trade uncertainty all weigh on global oil balances. Ultimately, EIR remains bullish relative to consensus and strip.
• Oil prices are discounted compared to what fundamentals would suggest with crude and product stocks low and global oil demand at record levels.
• EIR sees upside pressure compared to strip for NYMEX Henry Hub prices in the first half of 2025.

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Analysis conducted and written by Al Salazar