Global Economy and Energy Markets Weekly Commentary – 5th Apr ‘24

In this commentary to the Gulf IntelligenceDr Carole Nakhle, CEO of Crystol Energy, discusses the bearish forces affecting oil prices as well as the outlook for Europe’s economic position globally.

According to Dr. Nakhle, current developments should keep us more cautious about the optimism surrounding the current increase in oil prices. For instance, spare capacity is above five-year and ten-year averages, primarily as a result of OPEC+ cuts, a factor which could dampen the geopolitical risk premium. 

Additionally, while there has been some positive economic indicators coming from China, the country still has to deal with its domestic structural problems that won’t dissipate overnight. The more positive the data is coming out of China, the more reluctant the government will be in stimulating the economy. 

Another factor is that oil is still floating in the sea because of tanker diversions. Therefore, it’s only a question of time before those cargoes reach their intended destinations. Add to that more non-OPEC supply and the outlook for oil prices looks different, not only for this year, but for years to come.

Dr Carole Nakhle discusses the latest macroeconomic developments and their implications on energy prices in this interview given to the Gulf Intelligence

Dr. Nakhle then compared to crucial factors that have changed in Europe since the Russian invasion of Ukraine in 2022. The first factor is the lack of public enthusiasm for supporting Ukraine and fatigue from the ongoing war. The second factor lies in the attitude towards the energy transition and climate change policies within Europe. Before 2022, there was much excitement about saving the planet from further warming and pushing for green energy. Today, however, people are more concerned about what they are spending and the cost of living.

Dr Nakhle was joined by David Fyfe, Chief Economist at Argus Media, and Laury Haytayan, MENA Director at the Natural Resource Governance Institute. Sean Evers from Gulf Intelligence moderated the discussion.

Related Analysis

Oil market: Shifting expectations” Dr Carole Nakhle, Jul 2023

Related Comments

Impact of geopolitics and elections on global oil markets“, Dr Carole Nakhle, Jan 2024

Share this:

Recent Posts