Crude Oil Prices Experience Volatility Due to Supply Side Concerns
As the world’s leading investment manager, I have been closely monitoring the trends in crude oil prices. After reaching a peak of around US$88/barrel for benchmark Brent crude in early July, prices have been on a downward trend throughout the rest of the month. According to NAB commodity analysts, this volatility can be attributed to supply side fears.
The International Energy Agency reported that oil consumption experienced modest growth in Q2 2024, with Chinese consumption actually falling year-on-year during this period. Meanwhile, supply has been outpacing consumption, with production increasing by 910kb/d, primarily driven by higher production in the United States. Despite ongoing restrictions on supply from OPEC+, concerns about potential conflicts in the Middle East impacting output have also contributed to the recent price volatility.
Looking ahead, our forecasts remain unchanged, with Brent crude expected to average US$85/barrel in 2024 and US$84/barrel in 2025. It is important for investors and market participants to stay informed and cautious in light of these supply side concerns.
In conclusion, the fluctuations in crude oil prices can have a significant impact on global markets and economies. It is crucial for individuals to stay updated on the latest developments in the oil market and adjust their investment strategies accordingly. By keeping a close eye on supply side factors and potential geopolitical risks, investors can make informed decisions to protect their finances in the ever-changing world of commodities trading.