Global analysts say crude oil prices may hover around $80/b in 2024

Key global analysts have predicted that international oil prices would likely stay near $80 a barrel in 2024.

Analysts also predicted that weak global growth would cap demand, while geopolitical tensions could provide support.

They questioned whether the Organization of the Petroleum Exporting Countries and allies (OPEC+) would be able to sustain supply cuts to support the market.

The global benchmark Brent crude has averaged around $82.17 a barrel so far this year and was poised for an over 9 per cent yearly decline as a strong U.S. dollar boosted by a high interest rate environment and subdued demand from top consumer China weighed.

Reuters’ survey of 34 economists and analysts forecast Brent crude would average $82.56 in 2024, down from November’s $84.43 consensus. Just one contributor expected prices to average above the $90 mark next year.

U.S. crude was seen averaging $78.84 next year, from $80.50 last month.

“From the demand side we do not expect much impetus in the months to come,” said Thomas Wybierek, analyst at NORD Landbk.

“There is still a question mark behind the supply side. There are a lot of doubts (on whether) the OPEC+ alliance will be capable of reducing supply as decided recently.”

Last month, OPEC+ oil producers agreed to voluntary output cuts totaling about 2.2 million barrels per day for early next year led by Saudi Arabia rolling over its current voluntary cut to support the market.

OPEC+ is cutting some 6 million bpd from its output and its market share has fallen to 27 per cent.

“While it is difficult to maintain cooperation with all the members of OPEC+ at this time and price level all members are supportive of higher oil prices,” said John Paisie, president of Stratas Advisors.

Analysts polled also said geopolitical risks would keep oil prices volatile in the coming months.

“We think that there will be a greater concern about geopolitics in 2024 than in 2023 – and the associated risk premium will be substantially higher,” Paisie added.

Military clashes between Israel and Hamas sparked worries that a wider conflict could hit supply from the Middle East, the world’s biggest oil-supplying region. The latest attacks on ships in the Red Sea prompted fears of shipping disruptions.