2024 Oil Market Insights: Expert Projections and Economic Impacts

Anthony Seosky

Based on the latest forecasts and analyses, oil prices in 2024 are expected to be influenced by a variety of factors, including global economic growth, production levels, and geopolitical tensions.

The oil industry, a barometer of global economic health, is poised to witness a steady landscape in 2024 with prices expected to average in a range that suggests moderate growth and manageable supply. Expert analyses project that Brent crude oil prices might hover in the mid-$80s per barrel by year-end, reflecting a global economy that’s cautiously rebounding​​​​.

As the world’s energy watchdog, the U.S. Energy Information Administration (EIA), indicates a potential rise in Brent crude prices due to deliberate inventory drawdowns, industry analysts are closely monitoring the balance between supply and demand​​.

The U.S. Energy Information Administration predicts that Brent crude oil prices could increase to the mid-$80s per barrel by the end of 2024, with West Texas Intermediate (WTI) crude maintaining a $5 discount to Brent. This is due to moderate but persistent inventory drawdowns, driven by production cuts from OPEC members and higher petroleum consumption, leading to an average inventory drawdown of 0.4 million barrels per day between July 2023 and the end of 2024​​.

However, the global market outlook for 2024 is largely bearish with weak global economic growth, which is expected to cap oil demand growth. With WTI crude expected to average $78.84 per barrel, the year could see subdued oil demand and prices. Some of the factors contributing to this outlook include increased oil production from non-OPEC+ countries, offsetting OPEC+ supply curbs and limiting price increases​​.

Top U.S. banks forecast a median Brent price of $85 for 2024, citing demand growth and potential supply disruptions. Goldman Sachs revised its forecast to $70-$90 per barrel, while Citigroup predicts an average price of $75, factoring in slower demand growth and higher U.S. output​​.

Additionally, the International Energy Agency (IEA) and Goldman Sachs have reduced their forecasts, with the IEA seeing Brent at $82.57 per barrel in 2024, and Goldman Sachs expecting Brent to average $80/$81. This forecast aligns with the broader expectation that oil prices will have more downside potential due to the probability of a global economic recession​​.

In summary, while there is some variability in the specific numbers, the general consensus is that oil prices are likely to remain below the peaks of previous years due to a combination of increased supply, weaker global demand, and ongoing economic concerns.

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