Is Oil More Likely to go to $60 or $100 in 2024?

Is oil more likely to go to $60 per barrel or $100 per barrel this year?

The answer to that question is $100 per barrel, according to Michael Rubin, a Senior Fellow at the American Enterprise Institute (AEI), who expressed his view in an exclusive interview with Rigzone.

“Oil will rebound to $100,” Rubin told Rigzone.

“First, so many different regions are on the precipice of greater conflict. Second, the uncertainty surrounding the U.S. election will encourage rogues to act sooner rather than later,” he added.

“Third, a Harris administration is likely going to embrace the most radical positions advised by activists who care little about the reality that the world runs on fossil fuels and that kneecapping economies doesn’t make the air cleaner,” he continued.

When asked the same question, Kristian Coates Ulrichsen, a fellow for the Middle East at Rice University’s Baker Institute for Public Policy, and co-director of the Middle East Energy Roundtable, told Rigzone his prediction is that “we are likely to see oil closer to $60 than to $100 per barrel this year”.

Rigzone has contacted Vice President Kamala Harris for comment on Rubin’s statement. At the time of writing, Harris has not yet responded to Rigzone’s request.

WTI, Brent Forecasts

A research note sent to Rigzone on Monday by the JPM Commodities Research team showed that J.P. Morgan expects the WTI Crude price to average $80 per barrel in the third quarter of this year, $76 per barrel in the fourth quarter, and $78 per barrel overall in 2024.

The note outlined that J.P. Morgan expects the Brent Crude price to average $84 per barrel in the third quarter of this year, $80 per barrel in the fourth quarter of 2024, and $83 per barrel overall this year.

According to a Standard Chartered Bank report sent to Rigzone by Standard Chartered Bank Commodities Research Head Paul Horsnell on September 17, the bank expects the NYMEX WTI basis nearby future crude oil price to average $79 per barrel in the third quarter of this year and $84 per barrel in the fourth quarter.

Standard Chartered Bank expects the ICE Brent nearby future crude oil price to average $82 per barrel in the third quarter and $87 per barrel in the fourth quarter of 2024, the report highlighted.

A BMI report sent to Rigzone by the Fitch Group last Friday showed that BMI is expecting the front month WTI Crude price to average $78 per barrel this year. The report revealed that BMI sees the front month Brent Crude price averaging $81 per barrel in 2024.

In its latest short term energy outlook (STEO), which was released earlier this month, the U.S. Energy Information Administration (EIA) reduced its WTI and Brent spot price forecasts.

The EIA projected in its September STEO that the WTI spot price will average $78.23 per barrel in the third quarter of this year, $77.64 per barrel in the fourth quarter, and $78.80 per barrel overall in 2024. The EIA forecast in its latest STEO that the Brent spot price will average $81.89 per barrel in the third quarter, $81.64 per barrel in the fourth quarter, and $82.80 per barrel overall this year.

Blow to Bearish Sentiment

In a Rystad Energy oil macro update sent to Rigzone by the Rystad team late Tuesday, Rystad Market Analysis Director Claudio Galimberti highlighted a “blow to the bearish sentiment” in oil.

“The Chinese government’s announcement of its largest stimulus package since the pandemic, combined with the sudden rise of geopolitical tension in the Middle East, and the threat of another hurricane in the Gulf Coast, has dealt a blow to the bearish sentiment that dominated the oil markets in the past three weeks,” Galimberti said in the update.

“The stimulus is good news for oil demand, which has been weaker than expected, specifically in China, for the past three months,” he added.

“The threat of military escalation in the Middle East after Israel’s attack on Hezbollah adds more risks to the supply side,” he continued.

Galimberti went on to note in the report that, at $75 per barrel, prices are slowly inching back to their fair values consistent with the supply and demand fundamentals.

In a previous update sent to Rigzone on September 11, Galimberti noted that, at the APPEC show in Singapore that week, “it was hard to find any trader with a bullish view, even with Brent below $70 per barrel”.

“Most were talking about prices heading toward $60. But is that justified by the data? Supply and demand fundamentals point to stock draws in the second half of the year, which is incompatible with these expectations,” he added in that report.

“If China’s economy manages to rebound and OPEC+ maintains compliance, prices can only move upward from here. What’s needed is some positive news to improve the sentiment before fundamentals reassert themselves,” he continued.

To contact the author, email andreas.exarheas@rigzone.com