English 
Spanish 
4 min read
0 comments
Oil investors face 2024 with oversupply and demand uncertainty, Reuters economists say. OPEC+, exports, refineries and a strong dollar are key factors.
Investors in the oil market are preparing to face 2024 with lingering concerns. The latent tension in the Middle East, the slowdown in economic growth and excess supply are the main challenges that could trigger price volatility, keeping them alert to changes in the global scenario.
The Brent benchmark has averaged around $80 a barrel this year amid a volatile period. In 2022, prices rose above US$100 after Russian supplies were interrupted due to the start of the war in Ukraine, directly impacting the oil market. The current scenario remains challenging, with a strong dollar and robust non-OPEC production, despite demand reaching an all-time high of more than 100 million barrels per day (bpd), maintaining uncertainty in the market.
Rising Oil Price Predictions for 2024
A survey of the Reuters with 30 predictions of economists and analysts point out that Brent oil will average US$84,43 per barrel in 2024, a significant increase compared to previous projections.
- Billion-dollar offshore deal: PRIO invests US$1,92 billion and takes over 40% of giant offshore field in Brazil after Chinese companies leave
- New gas discovery in South America takes Venezuela to 300,9 BILLION barrels, surpasses Saudi Arabia, Canada and Iraq, and leaves the Middle East eating dust!
- Federal government approves and pre-salt oil will be auctioned! New Chinese dominance?
- China accelerates electric revolution and transforms global market: devastating impact on the automotive industry and oil redefines the economic and environmental scenario of the future!
These expectations arise despite demand. Growth forecasts ranging from 1,1 million bpd by the International Energy Agency to 2,25 million bpd expected by the Organization of Petroleum Exporting Countries (OPEC).
Supply in 2024 is expected to grow between 1,2 million and 1,9 million bpd, driven by non-OPEC producers, say consultancies Rystad Energy, JP Morgan, Kpler and Wood Mackenzie, demonstrating a significant increase in oil production in the global market.
"We are looking for an oversupplied market every quarter of next year," said Vikas Dwivedi, global energy strategist at Macquarie, highlighting changes in the oil market.
Here are the key factors to watch in 2024.
Challenges for Oil Investors
OPEC+ Compliance
Investors are watching first – quarterly supply data to see whether OPEC and its allies, known as OPEC+, have met their planned voluntary production cuts of 2,2 million bpd, highlighting the importance of OPEC's decisions and OPEC+ in the oil market.
If the group complies, this could lead to a small deficit of less than 500.000 bpd, ANZ said, highlighting the influence of OPEC and OPEC+ actions on prices and oil supply.
Ann-Louise Hittle of WoodMac said: 'The first quarter will be key as we can assess adherence to OPEC+ voluntary supply cuts.' Decisions by OPEC and OPEC+ can have a significant impact on oil prices and supply.
Impact of Exports and Sanctions
Wild Cards – Russia, Iran, Venezuela
Venezuelan oil has since returned to global markets. Washington suspended sanctions on the OPEC producer for six months until April, highlighting the volatility of oil exports.
There is likely to be another six-month extension as long as President Nicolás Maduro's government follows an electoral roadmap agreed with the opposition for a presidential election, JP Morgan analysts said, highlighting political instability and its impact on the oil market.
The resumption of heavy oil supplies from Venezuela to the United States and India could reduce demand for rival grades such as Iraq's Basrah Heavy and Canada's Cold Lake, traders said, highlighting the effects of oil exports in different regions of the country. world.
Global Market Trends
New refineries
Rigidities in refined products, especially diesel following the Russian invasion of Ukraine, are expected to ease with more than 1 million bpd of new production capacity. refinement will come into operation in China, India, Mexico, the Middle East and Nigeria in 2024, analysts said, highlighting changes in refining capacity in different regions.
These include Chinese newcomer Yulong Petrochemical, expansions at India's Panipat and Koyali refineries, Nigeria's Dangote project and Mexico's Dos Bocas, demonstrating the significant expansion of global refining capacity.
Oil quality incompatibility
Non-OPEC producers led by Brazil, Guyana and the United States are expected to boost production growth in 2024 by increasing the supply of light and sweet crude oil, while medium sour crude grades are expected to remain restricted to OPEC+ cuts, emphasizing changes in the composition and quality of crude oil available in the Marketplace.
This could tighten price spreads between crude oil grades around the world, Macquarie's Dwivedi said, with mid-grade crude trading close to parity. with light sweet of a typical discount of $2 to $4 per barrel, while the discount for heavy versus light oil could narrow to around $4 per barrel from $8 previously, highlighting changes in relative prices of different types of oil.
