The global oil market is gearing up for a slow year in 2024. Experts predict that the demand for oil will not grow much. This is due to weaker global economic growth and more oil being produced by countries that are not part of OPEC (Organization of the Petroleum Exporting Countries).
OPEC’s Efforts and Impact on Oil Prices
OPEC and its allies are planning to reduce their oil output by about six million barrels per day. This cut represents around six percent of the world’s oil supply. Despite this effort, the average price for US benchmark oil is expected to stay below $80 per barrel.
First Half of 2024: An Oversupply of Oil
The first half of 2024 might see more oil available than needed, leading to increased stockpiles. However, by the third quarter of 2024, there might be a slight shortage. S&P Global Commodity Insights suggests that, in this scenario, oil prices could rise above $80 per barrel, possibly nearing $90 per barrel.
Analysts’ Predictions for Average Oil Prices
A survey by Reuters involving 34 analysts and economists forecasts that WTI crude will average around $78.84 per barrel in 2024. Brent Crude is expected to have an average price of $82.56 per barrel, a decrease from previous estimates.
Comparison with Previous Years
In 2022, oil prices averaged over $100 per barrel. However, in 2023, the average price was just above $80 per barrel, even though there was a conflict between Israel and Hamas. This conflict briefly raised prices, but they soon returned to previous levels.
Geopolitical Risks and Oil Supply
Recent geopolitical developments, like a warship sent by Iran to the Red Sea, have added some risk to the oil market. However, analysts believe that the increase in oil supply from non-Opec+ countries is balancing out these risks.
OPEC+ and Future Decisions
OPEC and its allies, despite recent changes like Angola leaving the group, are working together to manage oil supply. Their next meeting on February 1 will be crucial. Angola’s exit after 16 years reduces OPEC’s membership to 12 countries, further challenging the organization.
Production Plans of Major Oil Countries
Saudi Arabia has voluntarily cut its oil production by one million barrels per day since July 2023 and will continue this through the first quarter of 2024. Russia has also announced voluntary cuts. These efforts are part of OPEC+’s strategy to manage oil supply and prices.
In summary, the oil market in 2024 is expected to experience slow growth in demand and a balance between supply and demand, with prices likely staying below $90 per barrel for most of the year.
Also Read:
Ahmed Al Obaidli on Gems & Metals Calibration Lab: A Leader in Diamond Testing in Qatar
Qatari Prime Minister Meets Families of Israeli Hostages Amid Tense Negotiations
