Global | Oil price balance and expectations for 2024

Summary

This year has witnessed the convergence of several sources of uncertainty within the financial and commodity markets. These factors have caused high volatility in the price of oil, which has fluctuated, in the year to date, between 75.7 and 91.8 dollars per barrel of Brent.

Key points

• Key points:
• This volatility is explained, among other factors, by the geopolitical risks, especially in the Middle East; the US election cycle; and uncertainty over US monetary policy.
• However, beyond the high volatility and a relatively high average price historically speaking, it is the high price amidst a context of weak activity that is the most worth noting aspect.
• This is due to several factors, including the decision to extend production cuts —both general and voluntary— announced by OPEC+, which has caused a tight balance within the oil market.
• Meanwhile, strategic demand from China remains high, offsetting the downturn due to the economic cycle. The need to re-route certain oil transport routes due to the ongoing threat in the Middle East has also had a role to play.
• However, the only certainty in the short-term is uncertainty, especially with the upcoming presidential elections in the United States. The price of oil will remain on a par with the level reported to date, with an average value for 2024 of around 84 dollars per barrel of Brent.

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