UBS forecasts Brent crude to trade at $80–$90/barrel in 2024

Brent crude is expected to trade in a $80–90 barrel range in 2024 as supply may outstrip demand, UBS said in a report.

“With OPEC+ spare capacity higher than before, ensuring that not-too-much supply is added will be a tough balancing act. The risk is that the market narrative shifts toward the idea that supply growth may start to outstrip demand growth,” the Swiss investment bank added.

UBS expects a slightly undersupplied oil market (–0.1 million barrels per day) in 2024, with OPEC+ holding back production until midyear and only gently adding production in the second half.

“We expect non-OPEC+ production growth to slow to around 1.3 million barrels per day (bpd). We expect oil demand growth of 1.4 million bpd, slower than in 2023 but still higher than the average annual growth rate of 1.2 million bpd seen since 2000.”

Brent crude oil fell below $75 per barrel in December but is now trading at $78 per barrel from $80 per barrel at the time of the year ahead publication).

The investment bank advised risk-seeking investors to sell Brent’s downside price risks or to add exposure to longer-dated Brent oil contracts, which trade at a discount to spot prices.

Source: Zawya