Oil investors will usher in 2024 with gnawing concerns about oversupply, slowing economic growth and simmering Middle East tension that could spark price volatility.
Benchmark Brent averaged around $80 a barrel this year, after a volatile 2022 in which prices surged above $100 after Russian supplies were disrupted following the Ukraine war.
Prices have been capped this year by a strong dollar and robust non-OPEC output despite demand hitting all-time high of more than 100 million barrels per day (bpd).
A Reuters survey of 30 economists and analysts forecasts Brent crude to average $84.43 a barrel in 2024.
Those expectations come despite wide-ranging demand growth forecasts ranging from 1 million bpd by the International Energy Agency to 2.25 million bpd expected by the Organization of the Petroleum Exporting Countries (OPEC).
Supply in 2024 is expected to grow between 1.2 million and 1.9 million bpd, driven by non-OPEC producers, say consultancies Rystad Energy, J.P. Morgan, Kpler and Wood Mackenzie.
"We're looking for an oversupplied market every quarter of next year," said Vikas Dwivedi, a global energy strategist at Macquarie.
Here's a look at the key factors to watch in 2024.
Investors are eyeing first-quarter supply data to see whether OPEC and its allies, known as OPEC+, followed through on the planned 2.2 million bpd of combined voluntary output cuts.
If the group complies, it could led to a small deficit of less than 500,000 bpd, ANZ said.
Woodmac's Ann-Louise Hittle said, "The first quarter will be key because we can assess adherence to the OPEC+ voluntary supply cuts."
OPEC+ would not need to extend the new voluntary cuts beyond the first quarter based on Woodmac's current demand forecast, she added.
Energy Aspects expects Saudi Arabia to taper its cut over the second quarter after it explicitly referred to restoring supply gradually, but added that did not prevent it from extending the cuts in full again if required.
