The oil market may become volatile again next year, with widespread anxiety among investors in the ‘black gold’.
Reuters reports that what concerns oil investors is a ‘gnawing worry about oversupply, slowing economic growth, and simmering tensions in the Middle East that could trigger price volatility.’
In 2022, when Russia invaded and started the war against Ukraine, the oil price rose to over $100 per barrel.
This year, Brent crude, the international benchmark in the market, has been averaging $80 per barrel.
What has held back the oil price this year is a strong dollar and the fact that OPEC production has not been robust despite high demand.
In a Reuters survey of 30 economists and analysts, the expectation is that Brent crude will average $84.43 per barrel in 2024, despite forecasts pointing to growth in demand.
‘Supply in 2024 is expected to grow by between 1.2 million and 1.9 million barrels per day (bpd), driven by non-OPEC producers, according to consultancy firms Rystad Energy, JP Morgan, Kpler, and Wood Mackenzie’, the news agency reports.”