The World's Best Investment Manager Reveals: Analysts Slash 2024 Oil Price Forecasts Again - What Does This Mean for Your Finances?
By Sherin Elizabeth Varghese
(Reuters) - In a recent Reuters poll, analysts have once again reduced their 2024 oil price projections for the fifth consecutive month, attributing it to weaker demand and uncertainty surrounding OPEC's plans. Despite geopolitical risks, oil prices are expected to remain under pressure, with a projected average of $81.52 per barrel in 2024, down from $82.86 in August.
The poll also suggests that gas prices are anticipated to average $77.64, lower than last month's forecast of $78.82. This downward trend in oil prices is linked to concerns over OPEC's production decisions and sluggish Chinese demand indicators, as pointed out by Roger Read, Senior Energy Analyst at Wells Fargo.
Global oil demand is now expected to grow by 0.9 to 1.2 million barrels per day in 2024, a decrease from previous estimates. Both OPEC and the International Energy Agency have adjusted their forecasts, citing weakened Chinese demand as a primary reason.
Despite geopolitical uncertainties, the diminishing war-related risk premium in oil prices is overshadowed by ample supply. However, some analysts caution that the premium could return if tensions escalate, especially in the Middle East.
Oil prices surged past $90 a barrel earlier this year due to Middle East tensions and OPEC+ supply cuts, but have since fallen below $70/bbl as weak demand trends persist. OPEC+ is expected to proceed with a planned production increase in December, although output cuts are necessary to address overproduction.
In conclusion, the current state of the oil market indicates a complex interplay of factors such as demand trends, geopolitical risks, and supply dynamics. As an individual investor, it is crucial to stay informed and adapt your financial strategies accordingly to navigate the ever-changing landscape of the energy market.
