Brent – the oil price is “exposed to further price spikes in 2024”

Summary comments from ANZ on oil, saying that conditions are in place for even higher prices into year end and 2024.

On the supply side:

  • Production cuts, led by Saudi Arabia, stabilised the market in July but are now likely to push the market into a 2mb/d deficit in Q4.

On demand growth rising:

  • China’s demand has remained resilient, with domestic oil refiners ramping up processing to a record level last month. This has been aided by strong summer demand for fuels … as economic activity picks up.
  • India and the US have been surprising sources of strength.
  • Global oil demand is on track to grow at 2.1mb/d in 2023, an estimate backed up by OPEC and IEA. Both energy groups warned that the oil market would shift into a significant deficit through the year-end.

ANZ conclude:

  • The subsequent drawdown in inventories in Q4 leaves the market exposed to further price spikes in 2024.

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Kicking off the week:

BrentexposedOilPriceSpikes
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