Analysts cut their oil price forecasts for the fifth consecutive month

Despite the geopolitical risk premium, oil prices will remain under pressure, weighed down by slower-than-expected demand and uncertainty over OPEC+’s withdrawal of production cuts, according to analysts in a monthly Reuters poll, who cut their forecasts price for a period. the fifth month in a row.

In last month’s survey, weaker Chinese oil demand and high global inventories prompted economists and analysts to cut their oil price estimates this year.

This month’s survey also showed further reductions in oil price forecasts by more than $1 a barrel for both benchmarks.

Brent crude prices are now expected to average $81.52 a barrel this year, according to analysts polled by Reuters. That’s down from August’s forecast of $82.86 a barrel and the lowest average forecast for 2024 that analysts polled have had since February.

US benchmark West Texas Intermediate crude is currently expected to average $77.64 a barrel for 2024, down from a forecast of $78.82 a barrel in August.

Early Monday, WTI was trading at around $68 a barrel and Brent crude prices were at $71 a barrel as the market appeared to have largely factored in the bigger geopolitical news coming out of the Middle East.

According to analysts polled by Reuters, the market is worried about the trend in China’s demand and whether new stimulus measures would increase fuel consumption.

Moreover, analysts also expect OPEC+ to go ahead and begin to withdraw production cuts in December – as is the current plan – despite the fact that global oil demand may not justify additional supply to the market .

Sufficient supply in recent months has reduced the geopolitical risk premium, some of the analysts polled by Reuters said.

Those risks may return if the war escalates further, but for now, the lack of a direct threat to oil supplies and the prospect of more supply on the market in two months are keeping oil prices low.

By Tsvetana Paraskova for Oilprice.com

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