Oil prices will remain stable as demand problems in China offset risks in the Middle East: Reuters poll

By Rahul Paswan and Kavya Balaraman

(Reuters) – Oil prices will not change much in the second half of 2024 as concerns about demand from China and prospects for greater supply from major producers counter risks from geopolitical tensions, a Reuters poll indicated on Friday. fair.

A survey of 44 analysts and economists polled by Reuters over the past two weeks predicted that global benchmark Brent crude would average $83.93 per barrel in 2024, just below the consensus of $84.01 in the previous month’s survey.

The 2024 U.S. average oil forecast of $79.72 was slightly above the May survey result of $79.56.

Brent crude futures have averaged $83.4 so far in 2024, after brief spikes to $92.18, driven by supply risks due to the Middle East conflict. [O/R]

“Apart from the noise, oil prices appear stuck in a sideways trend,” with supply and demand providing little guidance and storage levels fluctuating well within seasonal norms, said Norbert Rücker, an analyst at Julius Baer.

However, some analysts said prices could jump to the $90 mark and potentially beyond, depending on a variety of factors, including summer consumption, the geopolitical situation in the Middle East and production restrictions imposed by the Organization of Countries. Oil Exporters (OPEC).

Analysts expect oil demand to grow by between 0.99 and 1.4 million barrels per day (mbpd) in 2024, slightly above the 0.96 mbpd predicted by the Paris-based International Energy Agency.

Meanwhile, on the supply side, most analysts have noted that crude oil production from non-OPEC countries is increasing.

If OPEC+ moves forward with the gradual reduction of current production cuts starting in October, the market could move into a small surplus by the end of 2025, said William Weatherburn, an analyst at Capital Economics.

Earlier this month, OPEC and its Russia-led allies, known as OPEC+, opted to slowly reduce production cuts of 2.2 million bpd over a year starting in October, while also prolonging production cuts. another 3.66 million bpd by the end of 2025.

(Reporting by Rahul Paswan and Kavya Balaraman in Bengaluru; Editing by Arpan Varghese and)