Crude may fall below $60 by December; India demand to stay robust: S&P Global

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Crude oil price is expected to fall below $60 a barrel by the end of the year on strong supply and muted global demand, Premasish Das, executive director of S&P Global Commodity Insights, told Moneycontrol.

Speaking on the sidelines of S&P’s Commodity Market Insights Forum on July 3, Das said prices are expected to slide by year-end and hover in the $55-$60 range. At present, crude is trading at around $70.

“We think by end of the year (2025), the (oil) price can go below $60 per barrel levels because of so much supply and muted demand. The underlying assumption is that OPEC+ is not going to do anything, which means that they are not going cut production or defend any price,” Das said of the Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russia.

The oil market is well supplied primarily on account of higher supply from the OPEC + and weak global demand.

Beginning April, OPEC decided to unwind its 2.2 million barrels a production cut on a monthly basis. Crude slumped to $60 on the news before recovering to around $70. The cartel implemented the cuts in 2022 to support prices.

Global oil demand, on the other hand, is muted, largely due to China, the world's biggest oil importer, due to a slowdown in that country’s economy.

Das, however, also cautioned against potential geopolitical risks including the Iran-Israel conflict and OPEC bringing back supply cuts. In such a scenario, oil can climb to $70-$75, he added.

Das said India’s demand is expected to remain robust in the second half of the year. The country’s oil demand growth is expected to rise by 110-120 thousand barrel a day in the second half of the year.