A

1.Slow Global growth

In 2024 the IMF forecasts global growth to be around 2.9%, mainly due to high inflation, high cost of living, high interest rates and geopolitical tensions

These factors contribute to a weak demand for crude oil in the global market as the world recovers post pandemic and from a recessionary situation prevalent globally

Slow growth overall is expected to keep oil prices at around $82/barrel in 2024, but other factors such as Geopolitical tensions and developments in the middle east can put upward pressure on crude oil prices. USA and China alone account for around 20.3% and 13.2% of global oil consumption and the current slowdown in these economies are some of the reasons for the bearish sentiments in the oil markets

B

2 Supply disruptions from Russia-Ukraine war especially to the Euro Zone

Global oil prices in 2024 will be defined by the below areas of concern

·         Supply disruptions from Russia-Ukraine war especially to the Euro Zone

·         Israel-Palestine conflict and the risk of a spillover to other middle eastern nations can also cause supply disruptions as the Middle east accounts for 31% of global oil production Oil production cuts of around 300,000 barrels/day by Russia and Saudi Arabia can cause oil prices to rise in the near future in 2024

Further the Red Sea Crisis can also start to cause concerns on oil supply disruptions putting further pressure on oil prices

C

3.Stabilization of inflation

As per COP 28 resolutions made, the globe has to achieve net-zero by 2050, making this development a key concern for global energy prices including crude oil

With many nations placing higher emphasis on climate change more than ever before, green energy sources have been sought after, this in the long tern will reduce reliance on fossil fuels such as crude oil, decreasing the demand for it.

D

4.US Fed Interest rate cuts

In 2024, the US is expected to start cutting down rates in a bid to boost economic activity, this will have a direct effect on oil prices as rate cuts would boost domestic consumption demand and also may result in a weaker dollar as foreign investors move elsewhere from US treasuries, which would be lesser attractive, this would make oil purchases cheaper for foreign countries

N:B ; With major oil producing nations currently cutting production , an increase in demand resulting from the US signaling rate cuts could have a negative effect pushing up oil prices

E

5.Red Sea Crisis

This is not expected to have a direct effect on crude oil prices in the near term, but if the crisis were to prolong, it will raise concerns on supply disruptions of fuel to oil purchasing countries using the route.