Barclays lowers 2024 Brent oil price forecast to $93/b on demand concerns

Barclays lowered its oil price forecast for Brent crude futures next year by $4/b to $93/b on Nov. 8, but noted that the recent selloff in global oil prices may be overdone.

Platts, part of S&P Global Commodity Insights, assessed the physical Dated Brent crude benchmark at $84.71/b on Nov. 7, its lowest since Aug. 24, as a weakening demand outlook in the US and China overshadowed concerns of an escalation and potential supply disruption in the Middle East due to the Israel-Hamas war.

The Dated Brent benchmark is now more than $10/b below the recent peak of $95/b in the wake of Hamas' Oct. 7 attack on Israel, but up by around $10/b since the beginning of 2023.

Lingering concerns over the health of the global economy were supported this week by data showing a surprise spike in US oil stocks and economic weakness in top crude importer China.

"Demand concerns have returned recently but based on our assessment of the aggregate data, these might be misplaced," Barclays said in a note. "We lower our 2024 Brent forecast by $4/b but maintain our above-curve and consensus view on prices."

The bank noted that its Brent price forecast for 2024 remains $14/b ahead of the Brent forward curve.

On Nov. 7, oil analysts at Standard Chartered Bank forecast that the world's key oil demand centers of China and India will see a marked slowdown next year, underpinning a global fall in oil demand growth. Standard Chartered forecasts that Asia-Pacific region oil demand will grow by 952,000 b/d in 2024, slower than 2023's 1.26 million b/d growth but close to the average for the five years before the pandemic of 949,000 b/d.

Goldman Sachs last week, however, reiterated that it expects Brent futures to hit $100/b by June 2024 as global stock levels contract amid a tighter near-term supply outlook.

Oil analysts at S&P Global Commodity Insights expect the monthly average Dated Brent to decline from $93/b in October to $81/b in March 2024, "but with potential for volatility owing to wars and economic uncertainty". Prices are then expected to rise after the first quarter of 2024 with an annual average for Dated Brent of $85/b for the year.