News Digest: Reducing the impact of the Middle East conflict on oil prices
March 6, 2024
News Digest:
A recent survey notes that the Middle East conflict may have a reducing impact on the oil markets during 2024 with ample global supplies keeping prices around the $80 a barrel level. Alternative shipping routes could also mean reduced impact on deliveries, resulting in stable prices, says a news report.
Market analysts further noted that spare capacity was at a multi-year high and could keep the overall market sentiment under pressure. They noted that the OPEC+ oil producers could have a higher leeway to pump in more oil following their decisions to curb output. Capacity could decline only in case of higher voluntary cuts during the summer months.
Takeaway:
OPEC+ had reduced production totaling 2.2 million bpd for the first quarter of 2024 and is expected to decide on the course forward later in March. On its part, the IEA estimates OPEC’s spare capacity to be 5.1 million bpd, with 3.2 million bpd being held by Saudi Arabia. Analysts expect demand to grow between 1-1.5 bpd in 2024, which could prompt an increased output in the second quarter by OPEC.