Survey: Analysts raise oil price forecasts for 2024 as demand growth and supply constraints persist

(1) Oil prices will gain some momentum this year as demand increases and OPEC+ production curtailments continue to tighten oil supplies, already weighed by military conflicts, according to a survey released on Thursday. (2) The 46 economists and analysts who participated in the survey forecast that Brent crude futures will average $82.33 per barrel in 2024, up from $81.13 expected in February. U.S. crude oil futures are expected to rise to $78.09 from $76.54 in the previous month. This is the first upward revision of oil price forecasts for 2024 since the October survey. Chart: Most analysts raised their Brent crude oil price forecasts for 2024 (3) “We think the rally in oil prices will continue further into the summer,” said Florian Grunberger, senior analyst at data and analytics firm Kpler. "This is due to the impact of the geopolitical risk premium and the actions of OPEC+ members, coupled with the growth of Chinese demand. ” (4) Oil prices have risen more than 12% so far in the quarter, driven by geopolitical tensions in the Middle East, Houthi attacks on Red Sea shipping, and recent Ukrainian drone strikes on Russian oil refineries. (5) On the demand side, the overall forecast is broadly in line with the International Energy Agency’s (IEA) forecast of a 1.3 million b/d increase in 2024. (6) The IEA’s forecasts are far less positive than those of the Organization of the Petroleum Exporting Countries (OPEC). OPEC expects demand to rise by 2.25 million b/d this year, adding that demand growth in India, China and the United States in 2024 and 2025 could exceed current expectations. (7) Matthew Sherwood, chief commodities analyst at The Economist Information, said: "Traders are now fully priced in the impact of OPEC+ members’ extended production cuts amid stronger-than-expected demand. ” (8) OPEC+ members, led by Saudi Arabia and Russia, are unlikely to make any changes to their oil output policy before the all-ministerial meeting in June, according to three OPEC+ sources. (Full Story) (9) “It will not be easy to convince OPEC+ members as a group to reduce production in order to keep oil prices above a certain level,” said Suvro Sarkar, head of DBS’ energy industry team, noting that this would lead to an increase in excess capacity and allow OPEC+ members to lose market share to non-OPEC+ producers such as the United States