BAKU, Azerbaijan, March 18. In this month's update, BMI, a Fitch Solutions company, is keeping its Brent crude oil price forecast steady at $85 per barrel for 2024, a slight increase from $82 per barrel in 2023, Trend reports.
Throughout the past month, the front-month contract has maintained a tight range, with prices closing between $82-$84 per barrel. Market sentiment is wavering, as uncertainties in both supply and demand are exerting opposing pressures on prices.
This conflicting dynamic is expected to persist into the second quarter, with macroeconomic challenges weighing on Brent's trajectory while heightened geopolitical tensions offer support.
“Despite these short-term fluctuations, we maintain an optimistic outlook for stronger price performance in the latter half of the year. This optimism stems from an anticipated improvement in the macroeconomic landscape, which should boost sentiment and demand. Furthermore, the slowing growth of US production coupled with continued support from OPEC+ is expected to keep a check on supply levels,” reads the analysis provided by BMI.
Amidst the ongoing Russian-Ukraine conflict, oil markets have exhibited a degree of resilience.
“However, the recent escalation of attacks by Kyiv on Russian energy infrastructure has injected fresh momentum into Brent prices this month. Drone strikes have disrupted operations at three key refineries in Nizhny Novgorod, Ryazan, and Rostov, collectively affecting approximately 10% of Russia's crude distillation capacity. Nevertheless, any resultant production halts are expected to be short-lived. Additionally, the prevailing weakness in the middle distillate market is anticipated to serve as a limiting factor on price escalation. Recent market movements corroborate this outlook, with the ICE front-month gas oil contract showing minimal reaction to the mid-March attacks,” says BMI.
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