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Oil prices may be soft in 2024 amid surprisingly ample supply Sarah Kiernan Published Date: January 8, 2024 Goldman Sachs "While crude oil demand held up, the growth in supply has been surprisingly robust." "A year ago, the focus was on a soft landing or not. Demand delivered, but supply outpaced it." "US producers aren’t reinvesting as before, but they’re still looking to grow. OPEC cuts seem less deep." "Expect growth moderation; rig counts and reinvestment in capital down materially." "Colleagues suggest a $20 price collar. OPEC aims for $70-80 floor, eroding benefits above $90-100." "Oil prices fell post-November OPEC meeting, signaling potential for a softer 2024 market." "Notable investment in carbon capture, especially by sovereign-backed companies." "US methane standards announcement not market-moving, aligning with industry practices." "In 2021-2022, oil was a macro asset class; in 2023, a micro asset class focusing on supply-demand balances." "Risk of targeted political events exists, but with enough spare capacity, explosive moves in 2024 seem unlikely." https://lnkd.in/eHuziyUt

Oil prices have taken a tumble as global markets react to news of a ceasefire and concerns about oversupply in 2025. This comes as a stark contrast to the recent surge in prices due to geopolitical tensions and supply disruptions. The ceasefire has eased fears of disruptions to oil production in key regions, while the outlook for oversupply in 2025 is putting pressure on prices. As the world looks towards a future with potentially higher levels of oil production, markets are bracing for increased competition and a potential glut of supply. This could have far-reaching implications for the energy industry and global economies as a whole. #oilprices #ceasefire #oversupply #energyindustry #globalmarkets #oilproduction #supplydisruptions #geopoliticaltensions #oilandgas #energysector #commodities #crudeoil #oilsupply #marketoutlook #energyeconomics #oilmarkets #energynews #fuelprices https://lnkd.in/dtbGiT9X

A simple write up about oil market for next year Expectations The oil market in 2025 is expected to exhibit a mix of stability and potential volatility, influenced by a variety of economic and geopolitical factors: 1. Price Forecasts: Major institutions like Goldman Sachs and J.P. Morgan predict that Brent crude oil prices will average between $73 and $76 per barrel, reflecting relatively stable conditions but with some downward pressure from oversupply risks . The U.S. Energy Information Administration (EIA) similarly forecasts prices near $79 per barrel, supported by balanced supply and demand . 2. Supply Dynamics: Non-OPEC+ production, particularly from countries like the U.S., Canada, and Brazil, is expected to increase, potentially leading to an oversupply of over 1 million barrels per day. OPEC+ production cuts are likely to moderate this impact, but any deviation from their agreements could introduce volatility . 3. Demand Trends: While demand growth is anticipated to slow, particularly due to China’s economic deceleration and a global transition toward cleaner energy, sustained consumption in developing markets may help stabilize demand . 4. Geopolitical Risks: Events such as conflicts in oil-producing regions, shifts in U.S. energy policies, or unplanned production disruptions could create price fluctuations, though they are not the primary expected outcome . In summary, while the oil market in 2025 is forecasted to be relatively stable in terms of average prices, the risk of volatility remains due to potential geopolitical and supply-side disruptions. Careful monitoring of OPEC+ decisions and global economic trends will be essential for predicting specific price movements.

Global oil balances will tighten in the second half of 2024, but current prices and time spreads don’t indicate that demand growth will far outstrip supply... https://bit.ly/44WG8E4 #oil #oildemand #oilsupply #oilmarkets

The possibility of oil prices reaching $100 per barrel this year has been a topic of discussion in the energy market. Several factors could potentially drive oil prices to this level, including increased global demand, supply constraints, geopolitical tensions, and inflationary pressures. However, there are also factors that could potentially drag oil prices back down from this high level. Some of these factors include: 1. Increased production: If major oil-producing countries, such as OPEC+ members or the United States, significantly increase their oil production, it could lead to a surplus in the market and put downward pressure on prices. 2. Demand concerns: A slowdown in global economic growth, geopolitical stability, or the emergence of new variants of the COVID-19 virus could dampen demand for oil and lead to lower prices. 3. Energy transition: The ongoing shift towards renewable energy sources and increased focus on sustainability could reduce long-term demand for oil and put pressure on prices. 4. OPEC+ decisions: The actions and decisions of the OPEC+ alliance, particularly regarding production levels and supply management, can have a significant impact on oil prices. Any disagreements or shifts in policy within the group could influence price movements. 5. Currency fluctuations: Changes in the value of the U.S. dollar or other major currencies can impact oil prices, as oil is traded in dollars. A strengthening dollar could make oil more expensive for buyers using other currencies, potentially reducing demand and prices. Overall, while the possibility of oil prices reaching $100 per barrel is a possibility, there are several factors that could potentially drag prices back down. The energy market is influenced by a complex interplay of supply, demand, geopolitical events, and economic factors, making it challenging to predict price movements with certainty.

[WORLD] Oil prices have stabilized due to robust U.S. oil supply, which has offset weak global demand and eased market volatility. #OilPrices #USSupply #EnergyMarket https://lnkd.in/gz39xaZE

Although crude oil prices remained on the lower end during the earlier parts of the year, they have risen to more reasonable prices over time. Brent crude futures have grown by approximately 11% this year, and this has created a floor of $85 per barrel. OPEC had several output cutbacks during the start of 2024, and officials found these to be effective, since the global energy market was originally in deficit during the beginning of the year. However, over the past couple of months, global fuel consumption has amounted to approximately 2 MMbpd, which goes beyond the expectations that were set by the International Energy Agency and the OPEC cuts. #PGE301

#OOTT The #oil demand divide: By this point in the year, we usually expect to see a consensus emerging among forecasters regarding year-on-year oil demand growth for the current year. The high/low spread in outlooks should have narrowed compared to the beginning of the year forecasts. Yet, market participants are presented with a unique challenge as the two most prominent agency forecasts, the OPEC Secretariat and the IEA, are far apart in their assessment, with investment bankers somewhere in between. For global oil balances, market participants are scratching their heads regarding the current state and balance-of-the-year outlook for global fundamentals. The truth, as always, is in the pudding, as evidenced by how much inventories are declining in a bullish scenario or building in a bearish view —but that truth, unfortunately, will only come with a lag in the official data reporting, leaving the market to arbitrate between the two extremes by looking at time spreads on the forward curve as the best (albeit imperfect) gauge of relative market tightness. Below, see this chart from Bloomberg, based on Grant Smith's article 'Oil Watchers Unusually Divided Over How Fast Demand Is Growing'. Even for Q1, which is the past, the disparity in the growth assessment for global demand is quite large. Grant Smith, Bloomberg News Onyx Capital Group

A new Reuters poll suggests oil prices will average $76.61 per barrel in 2025, down from prior forecasts. Weak Chinese demand, ample supply, and a calm geopolitical landscape are driving this outlook, with analysts predicting sluggish growth. #OilMarket #OPEC #EnergyOutlook

"OPEC’s #oil demand forecasts still remain too bullish compared to the IEA’s. Maybe the cartel is content with oil prices around $80/bbl for right now, but should geopolitical risks fade, so will prices. To keep the market in balance, we expect OPEC to roll over its production cuts past March 2024. While slowing US supply growth will help in the journey to balance oil markets, we believe that OPEC and its partner countries will need to extend its supply restraint and cut production beyond the March 2024 expiry of the current deal. We expect a new deal to be announced in early March 2024." Nitesh Shah, Head of Commodities and Macroeconomic Research at WisdomTree in Europe #commodities #energy #markets