The global research unit at HSBC anticipates that the price of Brent crude oil will remain restricted between $75 and $85 per barrel in the medium term, with analysts expecting the surplus energy in “OPEC+” to compensate for any impacts resulting from geopolitical risks.
According to analysts at HSBC bank in a memorandum on Wednesday, the above-average surplus energy from the Organization of the Petroleum Exporting Countries (OPEC) and its allies will mitigate the impact of the escalating geopolitical risks and disruptions in the Red Sea.
According to Reuters, analysts indicate that the expected excess energy of “OPEC+” is projected to be 4.5 million barrels per day by the end of 2024, an increase from 4.3 million barrels per day by the end of 2023. This surplus is anticipated to help mitigate price increases.
They further stated that the disruptions in trade in the Red Sea are causing not only a marginal increase in oil prices, but also a lack of any supplies so far.
Furthermore, the “OPEC+” strategy faces challenges in impacting prices through regular production cuts due to increased production by non-OPEC countries and weakened demand.
It is expected that the global demand for oil will decrease due to the increasing shift towards using electricity, as more consumers rely on battery-powered vehicles.
Bank analysts expect crude oil demand to grow by 1.3% in 2024 compared to the previous year, and then slow down to 0.9% in 2025.
By 11:09 GMT today, Wednesday, Brent crude recorded around $79.51 per barrel, while US crude futures stood at $74.41.
