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HSBC lowers Brent forecasts due to trade tensions and sluggish demand for oil

HSBC lowers Brent forecasts due to trade tensions and sluggish demand for oil

HSBC reduced its Brent crude forecast on Tuesday. It cited rising trade tensions as well as an expected decrease in global oil consumption.

The Bank cut its Brent Price Forecast to $68.5 per barrel in 2025, and $65 for 2026.

The company also reduced its forecast for global demand growth in 2025 to 0.7 million barrels per day (mbd), and to 0.8 mbd in 2026, compared to the previous 0.9 mbd. This was due to an expected one-percentage point drop in global GDP.

The ambiguous U.S. policy on trade has created uncertainty in the global oil market and prompted the Organization of the Petroleum Exporting Countries to reduce its demand forecast by 150,000 barrels a day.

HSBC stated in a report that if prices remain between the low and mid $60s per barrel next winter, then the group may decide to pause its unwinding.

Brent crude futures fell 20 cents or 0.3% to $64.66 a barrel at 1049 GMT.

The bank stated that the U.S. pressure on Iran has not yet shown results.

Other banks, including JPMorgan and Goldman Sachs, have also revised down their oil forecasts.

Federal Register filings revealed that the Trump administration, on the geopolitical side, has begun investigations into imports of pharmaceuticals and semiconductors. The investigation was prompted by national security concerns arising from a heavy reliance on imported products, according to the Federal Register. (Reporting from Daksh Grocer and Anjana Anil, both in Bengaluru. Editing by David Evans.)

(source: Reuters)