Analysts have lowered their 2024 oil price forecast for the first time since February, reflecting lower risks to supply from ongoing wars in the Middle East and Ukraine, a Reuters poll showed on Friday. The poll of 41 analysts and economists surveyed in the last two weeks saw Brent crude averaging $84.01 per barrel in 2024, down from the April forecast of $84.62. U.S. crude is expected to average $79.56 in 2024, down from the previous forecast of $80.46.
“In the coming months, we do not anticipate any immediate threats to the oil market stemming from the conflicts in the Middle East or the Ukraine-Russia situation… the market has gradually discounted the ‘war premium’ associated with these geopolitical risks,” said SEB analyst Ole Hvalbye. However, he warned that this perspective carries a degree of complacency, and there remains a possibility that the market could be unexpectedly impacted by sudden developments.
OPEC+, led by Saudi Arabia and Russia, is set to meet virtually on June 2, where it is expected to keep in place its voluntary production cuts of about 2.2 million barrels per day (bpd). “Non-OPEC production growth will be driven by offshore developments in Brazil, Guyana, Norway, etc, while U.S. production will stay elevated,” said Suvro Sarkar, energy sector team lead at DBS Bank.
On the demand front, analysts expect growth of between 920,000 and 1.8 million bpd in 2024, with an average estimate of 1.35 million. This is down from a forecast of 1.37 million bpd in a Reuters poll in April but above the 1.1 million bpd forecast by the International Energy Agency in May.