CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Crude Oil 2024 Fundamental Outlook Preview

Article By: ,  Sr. Technical Strategist
December 30, 2023 8:46 PM

This is an excerpt from our full Crude Oil 2024 Outlook report, one of nine detailed reports about what to expect in the coming year. Click the banner at the bottom to download the full report.

Crude Oil 2023 in Review

Concerns over a recession (that never materialized) and decreased global demand weighed on oil prices early in the year. A decline of nearly 46% off the 2022 highs had erased the rally towards 130 with crude prices on the defensive for the entire first-half of 2023.

A technical breakout in July fueled a rally of more than 49% with WTI reversing sharply in September off downtrend resistance. WTI plunged nearly 29% off the 2023 highs with price trading just above multi-year downtrend support into the close of year. A decline of more than 11% year-to-date was marked by a seven-week decline into December with WTI trading at 71.40 at the time of this report. Heading into 2024, the focus is on a key support hurdle in price and with global production shifting to non-OPEC+ nations, the supply-demand outlook continues to favor of the bears. . . for now.

Oil Production

Source: EIA

OPEC+ production cuts were extended this year in an attempt to support oil prices but have been ineffective as of yet in stemming the recent sell-off. At the same time, US oil production has steadily increased since the 2020 plunge with this year marking fresh record highs in output. While production has since pulled off, the International Energy Agency (IEA) outlook for 2024 is projecting another record year of output in the US with increases Brazilian, Guyanese, and Iranian flows further lifting supply. The agency expects that non-OPEC+ nations will once again drive global supply gains in 2024 as OPEC+ continues to deepen voluntary production cuts.

Source: EIA

This shift in the global supply remains a central challenge for OPEC and the cartel may take further measures to support oil prices as their market share contracts. Along with the threat of rising geopolitical tensions / aggressions in the Middle East and Asia Pacific (which could impact production / transport), these two threats represent the largest “X” factors for oil prices heading into next year.

What about the outlook for crude oil demand? What are the key technical levels to watch moving forward? See our full guide to explore these themes and more!

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024