Oil: Slow growth meets geopolitical risk in 2024
The outlook for oil prices in 2024 hangs in the balance, with predictions hovering around $80 per barrel.
Analysts see a tug-of-war between potential upside from geopolitical tensions and downside pressure from a sluggish global economy.
A recent Reuters survey suggests a cautious optimism, with Brent crude averaging $82.56 in 2024, slightly lower than the previous forecast. American crude follows suit, expected to settle at $78.84 on average.
However, concerns cloud the horizon. "Demand growth likely won't pick up steam soon," warns Thomas Wybierek, an analyst at NORD Landbank. The shadow of a global economic slowdown looms large, potentially dampening fuel consumption.
Supply uncertainties add another layer of complexity. While OPEC+ pledged output cuts to stabilise the market, doubts linger about sustained adherence. "Maintaining cooperation within the alliance can be tricky," admits John Paisie, president of Stratas Advisors.
Geopolitical factors further fuel volatility. The conflict between Israel and Hamas, coupled with recent Red Sea attacks, casts a shadow over Middle Eastern supply, the world's largest source of oil. Any escalation could send prices spiralling.
Ultimately, the path of oil prices in 2024 remains an open question. The delicate interplay of economic realities, production decisions, and geopolitical flashpoints will determine whether the market stays steady, dips lower, or experiences sudden spikes.
Translation by Iurie Tataru
