Oil prices are expected to experience fluctuations in 2024, with various factors influencing the market dynamics. This will have significant implications for UK motorists, particularly in terms of fuel costs.
Top U.S. banks predict a median Brent price of around $85 for 2024. This forecast is based on anticipated demand growth and potential supply disruptions. Goldman Sachs has revised its forecast to a range of $70-$90 per barrel, while Citigroup predicts an average price of $75. The variations in these predictions reflect different assumptions about demand growth, economic conditions, and oil production levels, particularly in the United States.
The US Energy Information Administration (EIA) forecasts Brent crude to be around $94.91 per barrel and WTI crude to average $90.91 per barrel in 2024. These figures are an upward revision from previous estimates, reflecting the impact of OPEC+ production cuts and tighter global oil markets. The EIA anticipates that global oil demand will outpace production in the latter half of 2023 and much of 2024, leading to upward pressure on oil prices.
Goldman Sachs suggests that oil prices will likely trade between $70 and $100 a barrel for most of 2024. This prediction takes into account slowing oil demand growth due to tighter financial conditions and elevated US recession odds. However, they also note the potential for short-term volatility in prices, influenced by macroeconomic uncertainties and geopolitical risks. OPEC’s production policy and discipline are expected to be key factors in supporting oil prices in 2024.
For UK motorists, these predictions imply that fuel costs could remain high or even increase in 2024. The fluctuating oil prices will directly impact petrol and diesel prices, affecting the overall cost of driving. This situation could encourage a continued shift towards electric vehicles, as consumers look for ways to mitigate the impact of rising fuel costs. Additionally, the potential for short-term price spikes means that motorists may experience periods of particularly high fuel prices, depending on global events and market reactions.
In conclusion, while precise oil price predictions for 2024 vary, the general consensus points towards continued volatility and relatively high prices. UK motorists should be prepared for these conditions and consider their impact on travel and transportation costs.
