In this interview given to Yousef Gamal El-Din from Bloomberg, Dr. Carole Nakhle, CEO of Crystol Energy, assesses the outlook for oil demand in 2024 and the impact of geopolitics on oil prices.
Key takeaways:
– The oil market sentiment is more bearish this year. Most oil price forecasts have been revised downward. The Energy Information Administration (EIA) downgraded its forecast by US$ 10 per barrel for 2024.
– The structural economic problems particularly in China have constrained growth in oil demand, and the increase in non-OPEC supply, led by the US, have put a downward pressure on oil prices.
– The International Energy Agency (IEA) is more bearish than OPEC when it comes to global oil demand growth for 2024. OPEC expects 90% of global demand growth for oil in 2024 would come from Asia, led by China.
– The impact of geopolitics on oil can be assessed on two fronts: either actual supply disruptions or the fear of such disruptions. The former hasn’t materialized despite the war in the Middle East, while the latter should be assessed in context of spare capacity which is currently at non-concerning levels – largely due to OPEC+ cuts.
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