Oil prices outlook

In this interview given to Rotus Oddiri from Arise News, Dr. Carole Nahkle, CEO of Crystol Energy, discusses the outlook for oil prices amid the driving season and OPEC+ decision.

Dr Carole Nakhle discusses the effect of OPEC+ cuts on oil supply growth

Key takeaways:

– The summer traveling season is expected to translate into higher demand for oil, namely in the US, which will put an upward pressure on prices.  However, the American consumer remains cautious as the cash handouts received during the COVID-19 pandemic have dried up. In China, a main player when it comes to oil demand, the economy continues to suffer from lingering structural problems which in turn limits the growth potential for oil demand.

– For the first time since 2022, at its June 2024 meeting, OPEC+ announced that more barrels will gradually come to the market as of the fourth quarter of this year, sending a bearish signal to oil prices.

– OPEC has been the most bullish on global demand growth compared to other market observers.

– Given that there hasn’t been any major oil supply disruptions amid the geopolitical developments in Ukraine and Gaza and unless we see a major escalation, the market has already factored in that geopolitical risk. Besides, spare capacity is at comfortable levels.

– All oil price forecasts should be taken with a big pinch of salt. While our understanding of the factors that shape prices has improved significantly in recent years, predicting those factors remains a major uncertain undertaking.

Related Analysis

Oil markets: Relative stability amid geopolitical strife“, Dr Carole Nakhle, Feb 2024

Asia’s energy market: The new global epicenter“, Dr Carole Nakhle, Dec 2023

A rising China is reshaping global energy markets“, Dr Carole Nakhle, Nov 2023

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Is There a Geopolitical Risk Premium in the Oil Price Right Now?“, Dr Carole Nakhle, Feb 2024

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