Weaker-than-expected Chinese oil demand and high inventories globally have prompted economists and analysts in a Reuters poll to reduce their oil price forecasts for 2024 for the fourth consecutive month.
The experts in the monthly Reuters poll now see Brent Crude prices averaging $82.86 per barrel this year, down from $83.66 a barrel expected in the July forecast.
WTI Crude, the U.S. benchmark, is now projected to average $78.82 per barrel in 2024, down from $79.22 a barrel expected in last month’s poll.
Generally, the analysts polled by Reuters believe that the bullish drivers of the ongoing OPEC+ cuts and geopolitical flare-ups in the Middle East are being often trumped by the bearish demand data and oil imports in China and Europe.
Slacker-than-expected consumption could raise inventories more than previously thought at the end of the peak summer demand season, which would further pressure oil prices down, according to the experts.
Early on Friday, oil prices were down on the day, with Brent Crude trading below $79 a barrel and WTI Crude at around $74 per barrel, following the news that OPEC+ is considering ramping up production in October.
Oil prices continued to be under pressure despite the outage in Libya, where an estimated 700,000 barrels per day (bpd), more than half of the country’s production, was already offline as of Thursday due to a political standoff between the two rival governments in the east and west.
The potential of more supply from OPEC+ coming to the market as early as in October has also weighed on oil prices.
This week, Goldman Sachs lowered its expected range for Brent prices by $5 to $70-$85 per barrel, due to weaker Chinese oil demand, high inventories, and rising U.S. shale production.
OPEC+ could decide to add supply on the market in a move that could be “strategically disciplining non-OPEC supply,” Goldman Sachs’s analysts wrote.
“Prices could significantly undershoot in the short term, especially if OPEC were to strategically discourage US shale growth more forcefully, or if a recession were to reduce oil demand,” the bank’s analysts noted.
By Tom Kool for Oilprice.com