Oil prices edged higher amid demand concerns, market skepticism following OPEC+ output cuts and tensions in the Middle East.
Prices declined on Monday after OPEC+’s voluntary curbs announcement left traders disappointed, raising questions over compliance and future supply policy.
Meanwhile, the Israel-Hamas conflict and a series of attacks in Middle-Eastern waters fueled supply concerns, and falling U.S. factory orders in October contributed to investor fears of a broader economic slowdown.
Capital Economics said crude prices should decline by the end of next year as a result of less constrained global supply and modest demand.
It assumes OPEC+ production will gradually rise starting from April, likely driving supply growth at a time of only moderate growth in demand.
“We think that the oil market will be in a slight deficit on average over most of 2024 but with a surplus in the final quarter.”
Capital Economics forecasts Brent at $75 a barrel and WTI at $70 a barrel by the end of 2024, from previous expectations of $85 a barrel and $80 a barrel, respectively.