Barclays Slashes $4 Off Brent Crude Oil Forecast For 2024 | OilPrice.com - OilPrice.com
Barclays Slashes $4 Off Brent Crude Oil Forecast For 2024 | OilPrice.com
Barclays Slashes $4 Off Brent Crude Oil Forecast For 2024
There is plenty of uncertainty…
The U.S. is racing to…
Barclays has slashed $4 off its 2024 Brent crude forecast, pricing in expected higher export production from Venezuela and the U.S. supply and demand outlook.
The London-based bank is now forecasting an average Brent price of $93 per barrel for next year, coming in above consensus despite slashing its forecast.
"The recent decline in prices is driven primarily by the reappearance of demand concerns and not the fading of the geopolitical risk premium," the bank said in a note carried by Reuters, adding that “despite the ongoing transition, the supply side appears more constrained.”
At 11:12 a.m. ET on Wednesday, Brent crude was trading down 1.97% at $80 per barrel, for a $1.61 loss on the day, while West Texas Intermediate (WTI) was trading down 2.22% at $75.65 per barrel, for a $1.72 loss on the day.
Oil prices have now lost their war-risk premium gained in early-to-mid October on the Hamas-Israel conflict, which is now threatening to spill over into Lebanon. The market sentiment is that this conflict will not disrupt global oil and gas supplies for the time being, allowing a refocus on supply and demand fundamentals. In its reduced forecast, Barclays is eyeing new production from Venezuela following Washington’s temporary easing of sanctions in October. So far, that has not materialized, with output and exports actually declining for the previous month. Venezuela’s October exports fell by 19% from September, and new signs have arisen that sanctions, which have been eased for six months, may end up being reimposed due to the Maduro regime’s interference in the opposition’s primary vote for a candidate for presidential elections. Washington had temporarily lifted sanctions on the basis of a deal between the Maduro regime and the opposition to hold free and fair elections next year.
Barclay’s forecast is also based on expectations for a continued rise in U.S. output despite slowing demand, though the bank maintains a strengthening demand outlook, leading to its above-consensus price forecast for 2024. The London bank’s demand forecast for China has been raised by 300,000 bpd for next year.
By Charles Kennedy for Oilprice.com
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Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
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On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”