2024 Energy Highlights: Crude Oil

2024 Energy Highlights- Crude Oil

Our Energy Economist, Dominic Whittome, shares his Energy Highlights Report on oil, natural gas, and electricity prices in 2024. Delving into the dynamics of Crude Oil, petrodollar, Natural Gas, and Electricity, this marks the commencement of a comprehensive four-part blog series.

Geopolitical Tensions and OPEC+ Strategies Shape Market Trends

Oil prices rose steadily this year. The spot market eclipsed $90/bbl on 5th April following the agreement between Russia and Saudi Arabia to extend production cuts announced last year well into 2025. The market was further unsettled by missile attacks on Red Sea shipping and Russian refineries. Oil prices drifted back below $78/bbl in the first week of June, only to rebound sharply that same week to close above $86/bbl as hopes of a ceasefire in both regions were dashed again.
 
In terms of export policy, Russia, among certain other OPEC+ producers, may well have a nefarious interest in fanning the flames of inflation in Western economies despite short-term revenue needs. Meanwhile, the cartel’s swing producer, Saudi Arabia, is in a difficult position with troubles in Gaza cascading across the Middle East, so ministers will be wary of increasing output lest it be perceived to be ‘siding with the West’. The market is up just 4% this year, but any significant rises from now on will probably go unchecked. The kingdom’s predicament naturally plays into the hands of genuine ‘hawks’ within the OPEC+ with all sorts of ways to drive oil into three figures, even if we’ve yet to see any evidence of that as things stand.

Dominic Whittome

Dominic Whittome is an economist with 25 years of commercial experience in oil & gas exploration, power generation, business development and supply & trading. Dominic has served as an analyst, contract negotiator and Head of Trading with four energy majors (Statoil, Mobil, ENI and EDF). As a consultant, Dominic has also advised government clients (including the UK Treasury, Met Office and Consumer Focus) and private entities on a range of energy origination, strategy and trading issues.

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