NEW YORK: The crude futures market faced a significant 10% decline in 2023 due to geopolitical uncertainties and worries over the oil output levels of major global producers.
On the last trading day, Brent crude settled at $77.04 a barrel, down 0.14%, while US West Texas Intermediate (WTI) crude settled at $71.65 a barrel, down 0.17%. Both closed the year at their lowest levels since 2020, in contrast to the previous year’s 10% increase in Brent and 7% climb in WTI.
A Reuters survey of 34 economists and analysts forecasts a 2024 average of $82.56 for Brent, reflecting concerns about weak global growth limiting demand. Geopolitical tensions may, however, offer some support to prices.
Questions persist about OPEC+ commitment to supply cuts, currently at 6 million barrels per day, constituting 6% of global supply. OPEC faces reduced demand in the first half of 2024, coinciding with a decline in global market share.
The Middle East conflict raises fears of supply disruptions into 2024, adding volatility. Recent Red Sea attacks forced shipping reroutes, with some opting for Africa routes to avoid conflicts. — Reuters
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