Most public- and private-sector forecasts point to higher global oil prices in 2024. But just how much higher remains little more than an educated guess amid widespread geopolitical uncert🥂ainty.

The war in Ukraine enters its second winter with few signs of movement in what has turned into a protracted stalemate. Palpable tension persists between the U.S. and China, the world's largest oil importer. And, the latest incarnation of the decades-long battle between Palestinians and Israelis has heightened discord throughout the 澳洲幸运5官方开奖结果体彩网:oil-rich Middle East.

Fitch Ratings summed up how unexpected developments tied to the Middle East could ripple far beyond the price of oil.

"An oil price shock related to the Middle East conflict could be accompanied by tighter financial conditions, lower business and 澳洲幸运5官方开奖结果体彩网:consumer confidence, and corrections in financial markets," the rating agency s꧙tated in ꦰits year-end oil report.

Best Guesses for 2024

Fitch said a price shock boosting oil prices to $120 per barrel next year would slice 0.4 of a percentage point off worldwide economic growth. The International Monetary Fund (IMF) currently predicts the global economy will expand 2.9% in 2024.

Most 2024 oil price forecasts, though, have coalesced in the $90-per-barre🌌l range.

The U.S. Energy Information Administration (EIA) predicts prices for Brent crude, the global benchmark, will average $93 per barrel, up from an expected 2023 global average of $84 per barrel. Brent crude currently trades near $80 per barrel. It fell as low as $71.84 per barrel🃏 in late June before surging as high as $96.55 per barrel in late September as Saudi Arabia extended production cuts.

Despite the renewed turmoil in Israel that began in early October, Brent has fallen about $10 per barrel in the past month. Still, even though the EIA expects global production will increase by 1 million barrels a day next year, most analysts expect 💙pricꦍes will rebound from current levels.

Bank of America sees Brent prices averaging $90 per barrel in 2024, with 澳洲幸运5官方开奖结果体彩网:West Texas Intermediate (WTI) crude—the U.S. benchmark—averaging $86 per barrel next year. Goldman Sachs predicts Brent prices will aꦚverage $94 a barrel next year.

Key Variables

The EIA predicts production growth from non-OPEC countries will offset ongoing OPEC production cuts, helping maintain a "relatively balanced global oil market next year."

Elevated spare production capacity may limit the ups𒁃ide price🀅 potential from any unexpected shock, Goldman Sachs indicated.

BofA agrees but said in its 2024 energy outlook that OPEC has cut its output since 2022 and likely will continue doing so. Providing more support for oil prices: The U.S. government has said it would begin refilling its 澳洲幸运5官方开奖结果体彩网:Strategic Petroleum Reserve once prices slip to $72 per barrel.

Even again🎶st the backdrop of continued concerns about a potential recession, BofA sees much more potential for oil prices to surge unexpectedly than to fall.

"While downside [price] risk remains limited, upside risks to oil prices could come from Middle East tensions, U.S. sanctions enforcement, and potential Fed rate cuts," BofA said.