The important December 2024 IEA Oil Market report is out. While the period does not cover the world in 2025 with its increased volatility and swings, it provides an important insight into the foundations of the oil and energy markets.
So what does IEA report say? We will not cover the many insights the report provides (full report can be found here.), but rather highlight few we believe are important to what we at Hammerstein Capital do.
- The world oil demand is accelerating, behind non-OECD economies (we keep telling this). If we go by mid-point 1 MBOED increase, the 2025 will be 103.9 MBOED year.
- Supply ad demand are pretty balanced out for 2025 (and we see this reflected in current pricing). However, stocks are at the historic lows (incl. oil on water), which in our view, sets conditions for future price escalation. And this does not take into account potential supply disruptions from Venezuelan, Irani and Russian sources:
- Canada increased both production and exports. We already know in 2025 new export routes were tested, with Chinese refineries taking first loads of Alberta heavy oil. And with Canadian LNG finally operating, we believe 2025 is the right time to invest into the upside potential of Canadian Energy.
All Charts credits IEA, 2025.