Crude Oil prices fell more than 2 percent last week, snapping a seven-week rising streak, with WTI oil futures holding around $81 / barrel.

Oil Current Scenario

Crude Oil costs are down over two percent last week, shattering a 7-week winning run, and WTI oil futures hovering under $81 / barrel. amid China’s slowing growth and worries about further US interest rate rises overcame signals of tighter global supply. Poor-than-projected GDP figures and a worsening realty sector turmoil in China contributed to worries over the country’s faltering economy. And the Bank of China’s unexpected rate decrease unable to calm the market.

According to the minutes of the Fed’s July conference, US officials emphasized risks related to inflation. Which might require an extended time of tight monetary tightening or possibly a further rise. In the meantime, markets remain apprehensive despite signals of market tightening after OPEC+ giants Saudi Arabia & Russia. supply cuts

Crude Oil Near-Term Assessment

Overview of the forecast

The price of crude oil. In our estimate, the Brent oil current price averaging $85 / barrel in August. Crude prices for oil are up from June, owing mostly to Saudi Arabia’s prolonged unilateral reduction in crude oil output.  We anticipate that these variables will keep helping to lower worldwide reserves and push up the cost of oil in subsequent weeks. Leading to the Brent pricing reaching $86/b in the 2nd half of 2023.higher around $7 per barrel. Based on our July Near-Term Energy. Overview (projection for the same duration. time. In our prediction, growing global oil output in 2024 maintains track wih increasing demand for it, Putting mild price compression overall crude oil pricing starting in the Q2 of 2024

Crude Oil Long-Term Projections (2024)

According to the study, BofA Global Research maintains a Brent estimate of $90 / barrel with US WTI projection of $85 / barrel over the coming year.

While improved worldwide demand for energy patterns in 2024 may sustain the increasing path in prices for energy. Analysts anticipate constraints.

The analysts subsequently revised its world gross domestic product prediction, now predicting three percent growth in 2023 with 2.8% expansion in 2024. However, crude beta values to GDP remain not as high the way they once were.  While OPEC+ currently enjoys greater extra capacity as a result of the substantial cutbacks they solely enacted.

Current Performance

To counteract a portion unwinding of the Saudi ‘oil cut’ in the coming year. The worldwide GDP expansion of 3.5% to 4% in 2024. Meaning a rise of 0.7 to 1.2% higher, will be expected.

Furthermore, the likelihood of recession has diminished however not vanished.  While elevated actual and nominal interest rates internationally will raise refinance risk over the coming year.

Analysts believe that for Brent to remain over $100 / barrel on a sustainable basis, consumption fundamentals have to rise considerably.

Overall, analysts expect the world’s oil use to rise by 1.9 bpd in 2023, and 1.06 million bpd in 2024, “largely due to China.”

The US (EIA) forecasted Brent & WTI spot averages in 2024 to be $86.48 / barrel & $81.48 / barrel, accordingly. According to its newest immediate energy forecast (STEO) issued in August.

WTI Price Chart

Oil Price Predictions

According to the August STEO, the Brent spot rate will average $88 / bbl in the Q1 of the following year. And, $87/bbl in the Q2, $86 in Q3, as well as $85 in the final quarter of the year. WTI spot rates will likely hover around $83/bl in Q1 of 2024. And, $82 a barrel in Q2 period, and $81 a barrel in the third period. With $80 per barrel in the 4th quarter, according to the STEO.

The EIA forecasted in July the fact that the Brent spot rate would hover around $83.51 in 2024.  while the WTI spot pricing will trend $78.51 a barrel in the following year.

According to Standard Chartered, its Brent pricing will average $92 a barrel in the Q1 of 2024, $94/ barrel in the Q2. And, $98 a barrel in the 3rd quarter. Then $106 a barrel in the final period of the year. Based to the research, the business anticipates the WTI rate to hover around $89 a barrel in the initial quarter of 2024/ – And. $91/bbl in the 2nd quarter. Likewise, A $95 a barrel in the Q3, then $103 a barrel in the final quarter of the year.