In its latest oil price outlook commentary, BMI said the crude oil prices stood at US$83.5 (RM392.15) per barrel year-to-date.
BMI also maintained its Brent crude oil price estimate at an annual of US$82 (RM385.11) per barrel in 2025.
“In light of this, the balance of risk to our forecast lies firmly on the downside.
“However, we have opted not to revise our outlook at this point, but rather wait and see how price action plays out over the coming peak demand season in the northern hemisphere,” it said.
BMI said oil traders read the US interest rate cuts as supportive of both economic growth and the oil demand, and hence, it should subsequently buoy Brent.
It said the US Federal Reserve would likely cut its benchmark funds rate to 4.75% from 5.50% currently by year-end.
Additionally, it said that Brent has been closely tracking high-frequency economic data releases over the past 18 months, with releases that exceeded consensus expectations coinciding with gains in the oil price and vice versa.
“The current global real gross domestic product growth is forecast to stay broadly stable at 2.4% in 2024 and 2.5% in 2025, down from 2.6% in 2023.
“The geopolitical risks remain elevated and none of these present conflicts are likely to be resolved in the near-term pointing to ongoing (if low-level and sporadic) risk premia being priced into oil,” it said.
However, BMI pointed out that the US dollar could provide support to Brent.
“We forecast the US dollar index (DXY) to remain largely range bound between 100 and 108 this year versus its current level of 104.
“Slowing US economic growth and faster-than-anticipated interest rate cuts will pressure the dollar to the downside.
“But, the ongoing US presidential race elevated geopolitical risk and generally more challenging conditions for risky assets in H2 could push the greenback to the upside, lifting oil,” it said.
On oil demand, BMI put growth for the year at 1.9 million barrels per day, with China and India accounting for over 40% of the net global increase in fuel consumption forecast for 2024.
“On the supply side, it has been generally supportive of prices as the Organization of the Petroleum Exporting Countries Plus (OPEC+) is maintaining its close management of the market,” said BMI.