Oil prices will drop by 10% in 2023 due to supply and demand issues

 Oil prices will drop by 10% in 2023 due to supply and demand issues

Oil prices will drop by 10% in 2023 due to supply and demand issues

Crude oil futures dropped more than 10% in a turbulent 2023 because to geopolitical upheaval and worries about global oil output among key producers.

In 2023, there was a 10% drop in crude oil futures due to geopolitical upheaval and worries about major oil producers' production worldwide.

In the midst of geopolitical unrest and worries about oil supply levels from key producers worldwide, crude oil futures saw a 10% decline in 2023.

The last trading day of the year saw Brent oil settle at $77.04 a barrel, down 11 cents, or 0.14%. The price of a barrel of U.S. West Texas Intermediate oil dropped 12 cents, or 0.17%, to $71.65.

In 2023, both contracts had declines of over 10%, ending the year at their lowest points since 2020.

Following Russia's invasion of Ukraine, supply fears caused Brent to rise 10% and WTI to rise 7% in the previous year.

According to a Reuters poll of 34 economists and experts, demand for Brent oil is expected to be constrained by poor global growth, resulting in an average price of $82.56 in 2024 as opposed to the consensus of $84.43 in November. Price support might come from ongoing global concerns.

The ability of OPEC+, or the Organization of the Petroleum Exporting Countries and Allies, to carry out the production reductions they have pledged to increase prices has also been questioned by analysts.

Currently, OPEC+ is reducing output by around 6 million barrels per day, or roughly 6% of the world's supply.

OPEC's worldwide market share has dropped to its lowest point since the epidemic due to production restrictions and Angola's departure from the organization, which will result in poor demand for petroleum in the first half of 2024.

In the meanwhile, concerns about possible supply interruptions in the last few months of 2023—which are predicted to linger into 2024—have been raised by the Middle East conflict.

According to Andrew Lippo, president of Lippo Oil Associates, "as we approach into 2024, we will see continued instability, combined with geopolitical events and fears that disputes could spread across the region."

This month, prominent corporations were compelled to reroute their supplies due to assaults by the terrorist organization Houthi from Yemen on maritime boats traversing the Red Sea.

other firms are getting ready to start moving again via the Suez Canal, while other ships carrying crude oil and processed products are still opting for the longer route around Africa in order to avoid any tensions in the area.

The final day of 2023 saw a rise in geopolitical tensions in the Middle East as Israel stepped up its assaults in southern Gaza, driving up prices.

According to statistics from the U.S. Energy Information Administration (EIA) issued on Friday, UBS analyst Giovanni Stanovo noted that robust oil demand in October had given prices some support in intraday trade.

The study said that October's total US oil consumption increased 3.4% over the previous year.

Following two months of monthly records for production, August and September saw a modest decline to 13.248 million barrels per day in October in the United States.

The energy services company Baker Hughes (BKR.O) said in a report on Friday that energy firms added oil and natural gas rigs this week for the first time in three weeks, indicating production might climb in the future.

But for the year, the number of rigs decreased by 157, after increases of 193 in 2022 and 235 in 2021.