In February 2024, the price of Brent oil will be in the range of $85–90 per barrel, says Sergei Tereshkin, CEO of Open Oil Market. He told Izvestia about the immediate prospects for the global oil market.
“Last week, oil prices reached three-month highs. On Friday, trading in Brent oil futures expiring in April ended at $82.95 per barrel, and WTI oil futures expiring in March ended at $78.23 per barrel,” the expert noted.
According to him, the January rally in oil prices after the fall at the end of 2023 is due to several factors. First, he noted growing optimism about the prospects for the US and Chinese economies.
“US GDP data released on Thursday, January 25, showed that the country’s economy grew by 3.3% in the fourth quarter of last year, and not by the previously predicted 2%. The People's Bank of China last week lowered reserve requirements for local banks to free up more liquidity and thereby stimulate economic growth,” Tereshkin said.
As he explained, the strong economy of the United States of America and stimulus measures in China are strengthening the hopes of investors, traders and producers for increased demand for crude oil in 2024.
Secondly, according to him, an important factor supporting prices is the position of OPEC+ to reduce oil production by alliance members in the current 2024 by 2.2 million barrels per day.
Third, there is the expansion of conflict in the Middle East, including tensions in the Red Sea, attacks on ships by the Houthis of the Yemeni Ansar Allah movement, as well as British and US strikes on Houthi targets in Yemen.
The situation on the oil market this month will be affected by the US Federal Reserve's rate decision, as well as events in the Middle East.
Tereshkin said that, despite the next escalation of the conflict in the Middle East, most experts believe that the United States of America and its allies will not take large-scale military actions in relations with Iran, and the conflict will remain at the current level of exchange of missile and bomb strikes and UAV raids. The high risks of shipping in the Red Sea will remain, but nevertheless it will continue to be carried out, the expert suggested.
“Based on the above, we can predict that if the current positive background for accelerating global economic growth is maintained, as well as the continuation of OPEC+’s policy of limiting production and the persistence of current risks for shipping in the Red Sea, oil prices during February will tend to the upper limit of the range $85–90 per barrel,” concluded the General Director of Open Oil Market.
The day before, according to the London ICE Exchange, the price of Brent was at $81.4 per barrel. Prior to this, on January 25, the price of Brent oil futures for March delivery exceeded $82 per barrel for the first time since November 30, 2023.
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