Since the end of September, the price of Brent crude has fallen by about 19%. OPEC+ efforts to raise prices proved futile as investors put concerns about the impact of the Israeli war behind them.
The price of a barrel of Brent crude for January delivery closed in Thursday’s session on the London Futures Market, down 4.6%, reaching $77.42. Today, it is recovering slightly (+1%) to $73.63, but it is a far cry from the times when it was around $100 per barrel. Since the end of September, the price of Brent crude has fallen by about 19%. OPEC+ efforts to raise prices proved futile as investors put concerns about the impact of the Israeli war behind them.
Once again, market sentiment gives weight to the fundamental reality of crude oil: there is a lot of oil to be explored, which has led some analysts to estimate the price per barrel at around $50. But this is not the case with Goldman Sachs, which, in a research note on the development and prospects of the oil sector for the next year, places the price of oil in the range of 80 to 100 dollars.
“We expect demand growth to remain strong and OPEC core supply to remain low in 2024. We therefore expect the oil market to tighten at a moderate pace, but maintaining significant excess capacity to weather rising shocks, effectively delaying the supercycle,” Goldman Sachs says.
He added: “We believe that OPEC will ensure that the Brent price remains in the range of 80 to 100 dollars, taking advantage of its pricing power, with a minimum of 80 dollars coming from OPEC supplies and a maximum of 100 dollars coming from available energy.” . While increased non-OPEC supply or lower GDP pose downside risks to prices, we estimate that Brent will remain near $80 unless OPEC becomes less assertive. “This range should provide strong cash (15% over 12 months) and yield yields (12%), and we also see hedging value against geopolitical supply shocks,” the US bank adds.
With the price of a barrel of Brent crude falling from this year’s maximum of $96.5, on September 27, to $77, the big question is whether the downward trend that then began will stop in the coming months, or whether the decline that began… Then it continues until 2024. Brent is about to re-enter a downtrend (it will do so if declines from its highs exceed 20%), and many analysts warn of its continued decline in oil prices, in a market where oversupply is clear, which will only change If for some reason oil production declines further.
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