The price of Brent crude oil started a strong growth in mid-term and reached above 90 USD/barrel at the beginning of April – Global Economic Outlook April 2024 – Oil

The price of Brent oil began to grow strongly in the middle of the month and reached above USD 90/barrel at the beginning of April. Despite solid growth in global demand, the OPEC+ alliance’s restrictions on the physical market are maintaining a deficit in oil supplies. In addition to the fundamentals, the oil price is also increasing due to the gradually increasing geopolitical tension in the Middle East and Eastern Europe. the streams of Ukrainian drones put the capacity of Russian refineries out of operation, which is particularly reflected in the fuel markets. Since the beginning of the year, demand from Chinese refineries has been growing strongly, and global demand for oil should gradually reach a new historically record level by August. This development also led to improved sentiment among financial investors, who are increasing their long oil positions. The increase in tensions on the physical market also contributed to the increased sanctions by the US on the import of Russian oil, or restrictions on the import of oil from Mexico. Against the strong growth of oil prices, however, the effect of holding annual rates of large central banks on the outside is flat. U.S. rates support the U.S. dollar and lead to a potential weak demand for oil.

According to the EIA, the oil price forecast for this year and for the fifth year has been raised. Due to the expected sharp decline in global reserves and the ongoing geopolitical tension, the price of Brent oil should gradually rise this year and reach USD 92/barrel in August, and then fall again with the end of the motoring season. According to the oekv agency, in 2025 the OPEC+ alliance will end oil restrictions and global supplies should turn to a slight increase, which will lead to a drop in the price of Brent oil to USD 85/barrel at the end of the year. The thorn swing from the first half of April has moved straight up, but gradually falling, and implies a sharper trajectory for the future prices of Brent oil (82.1 and 76.9 USD/barrel at the end of this year and the fifth year, respectively). Dubnov CF, with a forecast of USD 83.2/barrel, moves above roughly the middle of the mentioned forecasts in a different horizon.