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<p><a target="_blank" href="http://gistreel.com/tag/crude-oil"><strong>Oil prices</strong></a> are poised to end the week on a positive note, reversing the discouragement that dominated the market earlier this year.</p>
<p>Brent crude for May delivery traded at $73.67 per barrel in the latest session, nearly $2 higher than a week ago, while WTI hovered at $69.67 per barrel, also up $2 from the previous week. This marks a $5-per-barrel recovery from the early-month lows.</p>
<h3>Market outlook and rig count trends</h3>
<p>A recent Dallas Fed Energy Survey indicated a slight increase in oil and gas sector activity in Q1 2025, but company outlooks remain cautious. The index fell by 12 points to -4.9, signaling lingering concerns among energy firms.</p>
<p>Meanwhile, U.S. rig counts have remained within a narrow range for 41 consecutive weeks. According to Baker Hughes data, the total U.S. rig count fell by one week-over-week (w/w) to 486, with the Permian Basin count declining by one to 300.</p>
<p>Drilling in the <a target="_blank" href="http://gistreel.com/tag/texas"><strong>Texas</strong></a> portion of the Delaware Basin dropped by three rigs, reaching a three-year low of 62. However, the U.S. gas rig count rose by two to 102, with Haynesville and Marcellus remaining stable at 30 and 26 rigs, respectively.</p>
<h3>Analyst outlook: No surplus, potential deficit ahead</h3>
<p>Commodity analysts at Standard Chartered report a growing bullish outlook in oil markets, largely due to the absence of feared supply surpluses. Instead, a potential supply deficit looms, with StanChart predicting demand will exceed supply by 0.9 million barrels per day (mb/d) in Q2 and 0.5 mb/d in Q3.</p>
<p>By contrast, the U.S. Energy Information Administration (EIA) offers a more conservative outlook, forecasting demand to outstrip supply by just 0.1 mb/d in Q2, with a balanced market expected in Q3. Both institutions anticipate a slight inventory draw across 2024 and 2025.</p>
<h3>Global oil demand remains strong</h3>
<p>StanChart data indicates global oil demand averaged 102.77 mb/d in January, marking a 2.19 mb/d year-on-year increase. The March 19 JODI release supports this assessment, with the EIA estimating demand at 102.74 mb/d—a growth rate of 1.85 mb/d.</p>
<p>While January typically sees seasonal demand dips, StanChart expects demand to surpass 105.0 mb/d for the first time in June, peaking at 105.6 mb/d in August 2025.</p>
<h3>U.S. oil production growth expected to slow further</h3>
<p>The dramatic slowdown in U.S. <strong>oil production growth</strong> observed in 2024 is expected to continue into 2025 and 2026. StanChart forecasts U.S. liquids growth will decline from 734 kb/d in 2024 to 367 kb/d in 2025, and further to just 151 kb/d in 2026.</p>
<p>Non-OPEC+ supply growth has already dropped sharply, falling from 2.46 mb/d in 2023 to 0.79 mb/d in 2024. Analysts attribute this primarily to a significant reduction in U.S. total liquids growth from 1.605 mb/d in 2023 to 734 kb/d in 2024.</p>
<p>With oil prices rebounding, demand remaining robust, and supply constraints emerging, market sentiment appears to be shifting toward a more bullish outlook. However, uncertainties around production trends and geopolitical developments will likely continue to influence price movements in the months ahead.</p>
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