How Low Can Oil Go? Heritage Foundation Talks to Rigzone

How low can the Brent oil price go in 2025?

That was the question Rigzone asked Diana Furchtgott-Roth, Director of the Center for Climate, Energy, and the Environment at The Heritage Foundation, in an exclusive interview recently.

Responding to the question, Furchtgott-Roth told Rigzone, “I don’t see the price of oil going much below $55 per barrel for any length of time” but warned that “the situation is volatile and could change”.

“The price of oil can decline because the supply increases or the demand goes down. The supply could increase as America ramps up production. Demand could go down if America or the rest of the world go into a recession,” the Heritage Foundation expert added.

Furchtgott-Roth went on to tell Rigzone that forecasting the price of oil depends on the macroeconomic outlook.

“The Blue Chip consensus predicts slower growth in the United States this year as the economy adjusts to new tariffs, but not a recession,” Furchtgott-Roth said.

“Job creation in the United States is healthy and the unemployment rate is below 4.5 percent,” the Heritage Foundation expert added.

In a Skandinaviska Enskilda Banken AB (SEB) report sent to Rigzone on April 9 by the SEB team, Ole R. Hvalbye, a commodities analyst at the company, highlighted that Brent “crashe[d]… to [a] four year low”.

“Since markets opened yesterday, Brent crude prices have tumbled another $4 per barrel, falling from already depressed levels to the current $60.9 per barrel - marking the lowest level in over four years (since early February 2021),” Hvalbye noted in that report.

In a Stratas Advisors report sent to Rigzone by the Stratas team late Monday, the company pointed out that the price of Brent crude ended the week at $64.59 after closing the previous week at $66.01.

“Last week, oil prices continued to slide downward following the substantial price drop of the previous week stemming from the announcement of additional tariffs by the Trump Administration that were significantly greater in magnitude than expected, coupled with members OPEC+ agreeing on Thursday to unwind their supply cuts at a greater extent in May than previously expected (411,000 barrels per day vs. 135,000 barrels per day),” Stratas added in the report.

The company went on to state that the outlook for oil demand is in flux because of the uncertainty around tariffs and the impact on economic growth and oil demand.

In a report sent to Rigzone by Standard Chartered Bank Commodities Research Head Paul Horsnell late Monday, analysts at the bank, including Horsnell, said net selling by money managers across the four main Brent and WTI crude oil contracts reached an all-time high of 219.5 million barrels in the week starting April 2.

“This was not only more net selling than in any week during the pandemic, it was more than the two heaviest weeks of pandemic net selling combined,” the Standard Chartered Bank analysts highlighted.

“Money managers had added 140.7 million barrels of net longs in the previous three weeks, but they net-sold enough in just one week to fully cancel out that rapid accumulation of longs, plus 50 percent more,” they added.

The Standard Chartered Bank analysts went on to state in the report that other indicators also show a sharp move to the short side.

“Our crude oil moneymanager positioning index saw a record week on week drop of 71.3 to -59.1, with the WTI positioning index reaching -100.0,” they noted.

“Around 80 percent of the net selling was due to the closing out of long positions, and just 20 percent was the opening of short positions,” they went on to state.

A research note sent to Rigzone by the JPM Commodities Research team late Monday noted that the estimated value of open interest across energy markets declined by $18.6 billion week on week. The note highlighted that this was a three percent week on week drop.

“The decline was led by crude oil and petroleum products which saw $2 billion week on week of net outflows across all trader types coupled with continued price weakness across the curve,” the research note stated.

“Our oil strategists’ have revised Brent price forecast to $66 ($62 WTI), down from $73 per barrel for 2025 and 2026 target to $58 ($54 WTI) amid heightened trade policy uncertainty and shift in OPEC’s reaction function,” it added.

“Open interest across natural gas markets declined by $8 billion week on week on the back of $2.8 billion week on week outflows and as the global natural gas price declined further,” it continued.

Rigzone has contacted the White House, the U.S. Department of Energy, and the American Petroleum Institute for comment on Furchtgott-Roth’s statements. Rigzone has also contacted the White House and OPEC for comment on the Stratas Advisors report and the JPM Commodities Research team note. At the time of writing, none of the above have responded to Rigzone.

In a report sent to Rigzone by the Goldman Sachs team on Monday, Goldman Sachs analysts revealed that they see the Brent oil price falling to under $40 per barrel under one scenario.

Goldman Sachs’ report outlined that the company’s base scenario sees the Brent spot price averaging $66 per barrel in 2025. The report also outlined that the company’s base case sees the Brent Futures price averaging $63 per barrel this year.

According to a BMI report sent to Rigzone by the Fitch Group on Monday, BMI sees the Brent oil price averaging $68 per barrel in 2025.

In its latest short term energy outlook, which was released on April 10, the U.S. Energy Information Administration projected that the Brent spot price will average $67.87 per barrel this year.

A Standard Chartered Bank report sent to Rigzone by Horsnell on April 8 showed that Standard Chartered expected the ICE Brent nearby future crude oil price to average $77 per barrel in 2025.

To contact the author, email andreas.exarheas@rigzone.com