New York: Bank of America (BofA) Global Research has revised its 2024 price projections for Brent and WTI crude oil, citing mounting geopolitical tensions and ongoing supply constraints maintained by the OPEC+ producer coalition.
The bank now anticipates Brent and WTI crude prices to average $86 and $81 per barrel respectively in 2024, with both reaching peak prices around $95 per barrel during the summer months.
As of 0902 GMT on Wednesday, Brent crude futures were trading near $89 per barrel, while U.S. West Texas Intermediate crude futures hovered around $85 per barrel.
In a research note, BofA highlighted the impact of improving economic growth expectations, projecting a deficit in global oil markets of approximately 450 thousand barrels per day in the second and third quarters of 2024, a factor not included in their previous forecasts.
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The bank also underscored the influence of geopolitical instability, which has not only heightened oil demand through longer trade routes but also disrupted supply chains by targeting Russian energy infrastructure. A recent instance includes a Ukrainian drone strike on Russia’s third-largest oil refinery, located approximately 1,300 km away from the conflict zone, impacting the processing of around 155,000 barrels of crude per day.
Furthermore, OPEC+ members, spearheaded by Saudi Arabia and Russia, recently agreed to prolong voluntary oil production cuts of 2.2 million barrels per day into the second quarter, further tightening global supply dynamics.
