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👉 Forecast 2024: what to expect from oil?
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Fall in the price of energy raw materials is the most unpleasant surprise of the past year. Neither geopolitics nor strict measures to reduce production reversed the negative trend. Supplies from Russia changed course from Europe to Asia, and the European market opened to American oil. Global demand is worse than expected, no shortages are expected, and prices are now much more comfortable in the $70 zone than at $100 per barrel.
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OPEC's policy faces a serious test. Risk of supply disruptions across the Red Sea is, of course, unpleasant, but modern logistics is adapting to this. However, the market underestimates the consequences of Angola’s exit from the Cartel.
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Huge oil production from the US, Brazil and Guyana has reduced OPEC's market share to its lowest level in 10 years. The aggressive forecast for demand growth of 2.25 million bpd has not yet been cancelled, and if it is realized, the Cartel will be able to regain control of the market and consolidate the price in the area above $100.
• If the US can avoid a recession, the Fed starts cutting rates, and stability returns to China, then the bulls have a chance, although the risk of geopolitical force majeure is very serious.
• If non-OPEC production (primarily in the US) grows at an accelerated pace due to artificially high prices, then the restoration of production in Iran and Venezuela may fully compensate for additional cuts by OPEC+ in the first quarter.
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We remind you: the Saudis can sharply change their strategy at any moment and, as already happened in 2020, flood the world with cheap oil at $40-50 to remove «obstinate and unsystematic» competitors from the market.
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In any case, a technical correction of 30-40% from current levels is necessary.
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In the next six months, both scenarios can be realized: speculative growth to $90-100, and at the beginning of summer – a collapse to critical cost levels. Try to be prepared – emotionally, technically and financially – for any situation.
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Profits to y’all!