Analysts cut their oil price forecasts for the fourth consecutive month

Weaker-than-expected Chinese oil demand and high global inventories prompted economists and analysts in a Reuters poll to cut their 2024 oil price forecasts for the fourth consecutive month.

Analysts in a monthly Reuters poll now see Brent crude prices averaging $82.86 a barrel this year, down from $83.66 a barrel in their July forecast.

WTI Crude, the US benchmark, is now forecast to average $78.82 a barrel in 2024, down from $79.22 a barrel estimated in last month’s survey.

Overall, analysts polled by Reuters believe the bullish factors of ongoing OPEC+ cuts and geopolitical crises in the Middle East are often outweighed by bearish demand data and oil imports from China and Europe.

Slower-than-expected consumption could push inventories higher than previously thought at the end of the peak summer demand season, which would further lower oil prices, according to experts.

Early on Friday, oil prices fell for the day, with Brent crude trading below $79 a barrel and WTI crude around $74 a barrel, following news that OPEC+ is considering raising production in October.

Oil prices continued to come under pressure despite the outage in Libya, where about 700,000 barrels per day (bpd), more than half of the country’s output, was already offline as of Thursday due to a political standoff between the country’s two rival governments. US. east and west.

The potential for more OPEC+ supply to the market as early as October has also weighed on oil prices.

This week, Goldman Sachs cut its expected range for Brent prices by $5 to $70-85 a barrel due to weaker Chinese oil demand, high inventories and rising US shale production.

OPEC+ could decide to add supply to the market in a move that could “strategically discipline non-OPEC supply,” Goldman Sachs analysts wrote.

“Prices could outperform significantly in the near term, especially if OPEC strategically discourages stronger US shale growth or if a recession reduces oil demand,” the bank’s analysts noted.

By Tom Kool for Oilprice.com

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