The Upward Trend of Oil Prices in 2024
The Positive Outlook for Oil Prices
Oil prices are expected to gain momentum in 2024 as demand rises and the OPEC+ producer group continues to limit output. This, coupled with supply constraints due to ongoing military conflicts, is projected to push prices higher, according to a recent Reuters poll.
Analysts’ Projections
A survey of 46 economists and analysts predicts that oil prices will average $82.33 a barrel in 2024, reflecting an upward revision from previous estimates. Expectations for 2023 have also been raised, indicating a positive outlook for the oil market.
Factors Driving the Rally
Senior analyst Florian Grunberger from Kpler attributes the oil price rally to geopolitical risks, OPEC+ decisions, and increasing demand from China. Recent events in the Middle East and Ukraine have also fueled a 12% increase in oil prices this quarter.
Supply and Demand Dynamics
While demand is expected to rise by 1.3 million barrels per day in 2024, OPEC’s forecast is more optimistic, projecting a growth of 2.25 million bpd. The balance between supply cuts and robust demand is shaping the current market scenario.
Policy Decisions and Market Trends
OPEC+ members are unlikely to alter oil output policies until their full ministerial meeting in June. Challenges in maintaining oil prices amidst surplus capacity and competition from non-OPEC+ producers like the United States pose significant hurdles.
