A Reuters poll of 46 economists and analysts indicates an optimistic outlook for oil prices in 2024, driven by increasing demand and ongoing supply limitations enforced by the OPEC+ producer alliance. Forecasts suggest that Brent crude is projected to average $82.33 a barrel this year, up from the previous consensus of $81.13, while U.S. crude expectations have been revised to $78.09 from $76.54 in the previous month. This upward revision marks a shift from earlier projections and reflects the collective anticipation of a sustained oil price rally supported by geopolitical tensions, supply constraints, and growing demand, particularly in China.
The recent quarter has witnessed a more than 12% increase in oil prices fueled by geopolitical unrest in the Middle East, maritime security threats, and regional conflicts impacting supply dynamics. Despite varying demand growth forecasts, with the International Energy Agency projecting a 1.3 million barrel per day increase in 2024, OPEC’s more bullish outlook anticipates a higher demand growth rate of 2.25 million bpd. The alignment of supply cuts by OPEC+ members, led by Saudi Arabia and Russia, and robust demand trends has bolstered market sentiment and contributed to the positive price momentum.
However, challenges lie ahead in maintaining cohesive supply management within OPEC+ amid rising surplus capacity and competitive pressures from non-OPEC+ producers like the United States. The upcoming OPEC+ ministerial meeting in June is expected to provide clarity on future production policies, with market dynamics and geopolitical factors continuing to influence oil price trajectories in the foreseeable future.