Global | Oil: An erratic 2023 is behind us, while an uncertain 2024 gets underway

In 2023, the price of Brent crude averaged USD 82.5, falling from over USD 100 in 2022, driven by the war between Russia and Ukraine, although its trend over the past year has been somewhat erratic and dominated by a wide array of events.

Key points

• Key points:
• Last year, the price bottomed out in March, at 71 USD/barrel, following news of the collapse of Silicon Valley Bank in the United States, in an event that threatened to create a global recession.
• A few days later, it temporarily hit $88/barrel, though with the alert on global banking in effect, it then slipped below $75/barrel between May and June. However, prices soon began to increase once again in the second half of the year, due to a combination of resilient economic data, fewer concerns over banks and the push for voluntary cuts from OPEC+.
• In an environment of high global volatility, BBVA Research expects an average price of 86 USD/barrel Brent in 2024, although it begins the year with a significant headwind amid weakening economic activity.
• However, we believe that over the course of the year, supply constraints from OPEC+ and the reduction of economic incentives for US shale may push the price higher.

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