Inertia still dominates the oil markets, with little change from the disorientation caused by the rush of U.S. policy changes.
That’s what analysts at Standard Chartered Bank, including the company’s head of commodities research, Paul Horsnell, said in a report sent to Rigzone by Horsnell late Tuesday, adding that “Brent has continued to cling doggedly to the origin of any graph of price changes”.
In the report, the analysts said “volatility remains low” noting that “while 30-day realized annualized Brent volatility rose 2.4 percentage points week on week to 18.9 percent at settlement on 24 February, it remains within the lower 10 percent tail of its 10-year distribution”.
Despite the lack of movement year to date, there are some signs that the path of least resistance in the short term might be lower, the Standard Chartered Bank analysts stated in the report, highlighting that they “would point to three in particular”.
“First, market technicals have turned relatively bearish in the very short term. Second, we think most machine-learning or AI models have turned short-term bearish,” the analysts said in the report, noting that Standard Chartered’s own machine-learning model is indicating a $1.65 per barrel week on week fall for March 3 settlement.
“Finally, the annual London International Energy (IE) Week round of research, consultant and trader events appears thus far to have accentuated the negative in terms of the oil market outlook,” they added.
“In previous years the mood of the week has often been self-reinforcing, with a large cadre of traders returning to their trading desks having all heard the same negative elements,” they continued.
The analysts stated in the report that they “think the bearishness evidenced in IE Week has been somewhat overdone”.
“Part of it is simply a follow-through from the analyst negativity that characterized the latter half of 2024,” they said.
“The consensus then was of large and imminent market surpluses driven by expectations of a flood of incremental non-OPEC+ supplies. While the predicted large surpluses did not occur in H2-2024 or so far in Q1-2025, they have their echo in further predictions of surplus, albeit smaller and delayed further,” they added.
“The belief in a sudden surge of non-OPEC+ supplies has also not faded, despite last year’s U.S. slowdown, the underperformance of Brazil relative to forecasts and ongoing tightness in the prompt crude oil market,” they went on to state.
The analysts noted in the report that U.S. oil liquids supply growth halved in 2024 and said they expect it to halve again in both 2025 and 2026. They added that they do not see non-OPEC+ supply growth as the primary driver of incremental balances in either year.
Standard Chartered Bank’s report showed that the company expects the ICE Brent nearby future crude oil price to average $82 per barrel in the first quarter of 2025, $84 per barrel in the second quarter, $89 per barrel in the third quarter, $93 per barrel in the fourth quarter, and $93 per barrel overall in 2026.
Rigzone has contacted the Trump transition team, the White House, and the U.S. Department of Energy (DOE) for comment on Standard Chartered Bank’s report. At the time of writing, none of the above have responded to Rigzone.
According to a research note sent to Rigzone by the JPM Commodities Research team on Friday, J.P. Morgan expects the Brent crude price to average $74 per barrel in the first quarter of this year, $77 per barrel in the second quarter, $73 per barrel in the third quarter, $69 per barrel in the fourth quarter, and $61 per barrel overall in 2026.
A BofA Global Research report sent to Rigzone on Monday revealed that BofA Global Research sees Brent averaging $75 per barrel in 2025 and $73 per barrel in 2026.
A BMI report sent to Rigzone by the Fitch Group on February 14 showed that BMI expected the front month Brent crude price to average $76 per barrel this year.
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